The Best Life
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Roth IRA Conversions Worth Considering
Continue reading… 2 CommentsFidelity Investments reports that a survey of 800 customers finds very little understanding of Roth IRAs. USAA, another big financial-services firm, did a similar survey over the summer and found the same thing. Both firms say the lack of understanding could be very costly to investors next year, when special rules take effect permitting holders of regular IRAs to convert them into Roth IRAs regardless of their taxable income levels. Right now, less than 10 percent of those surveyed plan to take advantage of the 2010 conversion rule. The companies say the percentages likely would be much higher if investors better understood Roths and the possible conversion benefits.
[See A Guide to Roth IRA Conversions.] -
Three Tips to Protect Your Credit Rating
Continue reading… 1 CommentThe Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, this week explores how to get a free credit report and protect your credit rating from being lowered.
[See 6 Money Lessons of the Great Recession.] -
A New Role for Stocks in Retirement Funds?
Continue reading… 2 CommentsThe stock market—and retirement accounts—are slowly recovering some of the horrendous losses inflicted in 2008 and early 2009. No one knows how many years it will take before investment values claw their way back to the level of the fall of 2007. But what is clear is that stocks will lead the way up, as surely as they led the collapse. What's also clear is that many investors have been warned away from retirement funds with heavy stock weightings.
Target-date mutual funds, which are designed to produce optimal returns based on a planned retirement date, have taken a sustained drubbing from many consumer advocates who have testified on Capitol Hill and from more than a few investment experts. The funds hold a mix of stocks, bonds, and money-market instruments and automatically adjust the percentages of such holdings as investors near retirement. This is known as a "glide path." When such funds designed for people reaching retirement age in 2010 lost 25 percent of their value last year, it came as a shock—especially to those who thought funds designed for people retiring soon should have been much less heavily invested in stocks.
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Here are Memories Worth Preserving
Continue reading… 0 CommentsFor the past 12 years, Beloit College has produced an annual list of things we take for granted but which are alien to incoming college freshmen. It is an enjoyable way to feel really old. This year's list, for example, reminds us that Shrek is the only Green Giant that this year's college freshmen know, that they have never used a card catalog and that the phrase "Help, I've fallen and I can't get up" means nothing to them (and neither does Steve Urkel).
[See America Turns Inward in Tough Times.] -
Four Free Entertainment Tips for Families
Continue reading… 2 CommentsThe Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, this week explores totally free, fun things to do with your family. “A couple of weeks ago you had ideas for no or low cost entertainment for singles," a member asks. "I’d like to learn suggestions for free entertainment for families on a tight budget. Our family plays board games and cards and we go to area parks, but would like to try some different free activities out of the house. My daughter is 13 and my nephew is 8.” Here are some Boomerater replies:
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These Digital Doctors Thrive on House Calls
Continue reading… 4 CommentsWireless and other digital forms of virtual healthcare, if designed and used well, can save a large amount of money, create better health outcomes, and help seniors remain in their homes. The extent and timing of this trend remains unclear, but seniors and their families should expect to see various forms of remote medical care headed their way. With aging populations soaring in virtually all of the world's most affluent countries, using technology to save money and improve medical care is set to become a major global industry.
[See tips on Making a Housing Plan for Your Later Years.]
Last April, General Electric and Intel said that they would partner to develop and commercialize home healthcare technologies. Thousands of start-up companies may have promising technologies and share similar dreams. But perhaps none have the commercialization experience, government-relations savvy, and global reach of GE and Intel. Today, the companies' home healthcare offerings include GE's QuietCare product and the Intel Health Guide. GE will market the Health Guide through its sales network, and the companies say they will invest $250 million in building the partnership over the next five years. Given their size and the scale of the opportunity, that number most likely is only an opening ante in what will be a much bigger game.
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Is This High Tide for Senior Finances?
Continue reading… 0 CommentsFor people using Social Security and Medicare, today may some day be remembered fondly as the high-water mark of these benefit programs. And as the financial pressure for reduced support mounts, it would be wise to step back and see what your next five to 10 years would look like if the values of these benefits declined by five or even ten percent. The odds of such a steep decline are slight but so were the chances that housing and investment markets would take a double swan dive of historic proportions. This is the time to think about such matters, not when they're already here, staring you in the face.
[See Why Retirement Spending Is More Art Than Science.] -
Four Financial Tips for Widows
Continue reading… 1 CommentThe Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, this week helps widows plan for their financial future while avoiding mistakes others have made. “My dear husband recently passed away," a Boomerater member writes. "For 40 years he handled our finances and I’m lost without him. I want to make sure our savings last so that I have financial security. My husband was a wonderful handyman who could fix anything and he did most of the yard work. I am considering selling the house and moving to a retirement community. Also, I work full time, but am thinking of retiring or changing to a less demanding job. There are so many decisions to make, where do I start?” Here is what other members said:
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Why Retirement Spending Is More Art Than Science
Continue reading… 8 CommentsRetirement experts have long advocated a conservative approach to spending down retirement assets. That's to ensure people don't outlive their funds. The most common rate recommended is 4 percent a year, although 5 percent and even 6 percent are sometimes considered appropriate, depending on an individual's financial circumstances and health. In the real world, however, there are wild variations when it comes to how people spend their money.
[See 3 Ways to Get Your 401(k) Back on Track.]
Research on the spend-down patterns of retirees leaves some to be desired. Fidelity Investments says its 18 million customers spend down their assets at a rate slightly above 4 percent. But that's an aggregate average that masks wild variations in behavior. And even at Fidelity, which beats the drum of retirement planning loudly and regularly, only 20 to 25 percent of those 18 million customers have ever completed a retirement plan, let alone followed its recommendations.
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Grandparents Get a Day -- Deserve Whole Year!
Continue reading… 0 CommentsRetirement was a receding concept for many grandparents even before the recession. But now, with pocketbooks and portfolios squeezed, and with many adult children out of work and struggling economically, grandparents are expected as never before to pitch in. So, when the 30th anniversary of the nation's first Grandparents' Day rolls around on Sept. 13, take your bow. Then, get back to work!
[See America Turns Inward in Tough Times.] -
Poor Social Security Knowledge Has Big Costs
Continue reading… 3 CommentsSocial Security is the primary source of retirement income for most Americans. Even among affluent people who have built solid retirement plans, Social Security is an important source of stable income that is often used to cover fixed living expenses. Given its importance and central role, you'd think people would take the time to understand the program. And, of course, you'd be wrong.
[See Tips on Social Security Claiming Strategies.] -
Advice for Seniors with Vision Loss
Continue reading… 3 CommentsThe Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, this week explores current and future treatments for macular degeneration, America’s number one cause of age-related blindness. “I was just diagnosed with macular degeneration,” a Boomerater member asks. “Anyone have experience with this disease? Are there any treatments that work? I’ve never had a problem with my eyes and this came from out of the blue.” Here is what some of our members said:
Personal experience with macular degeneration. I have macular degeneration (MD) in both eyes. The Amsler grid is used to determine if you have MD. When I look at the grid with just my right eye all of the lines of the grid seem straight and clear. With my left eye the lines are wavy and distorted. My ophthalmologist diagnosed macular degeneration and sent me to a retina specialist. My mother and both of her siblings had MD, so I was genetically predisposed to get it. The retina specialist took pictures of my macula, the central part of the retina that provides for sharp, clear vision. The pictures showed I had “dry” MD in my right eye, and “wet” in my left. Wet is the worse of the two. Both eyes have “drusens,” which are yellow deposits under the retina. These are early signs of MD but they alone don’t cause severe vision loss. The center of my left retina has a protuberance that is distorting my vision. -
4 Questions to Ask About Private Pensions
Continue reading… 2 CommentsRemember traditional pensions? They have been the envy of retirees everywhere, providing guaranteed lifetime payments that remain fixed despite any economic or stock market reversals. But as the late economist Milton Friedman used to regularly remind us, there is no such thing as a free lunch. And that applies to defined-benefit pension plans.
[See the Top 25 Market Movers of 2009.]
Private pensions have been hammered nearly as hard as 401(k)'s, IRAs, and other self-directed retirement investments. During the past two years, the value of pension plan assets fell. The recession pummeled corporate profits as well. Thus, employers had trouble providing funding to shore up the plans. As a result, Congress enacted emergency relief to give companies several more years to establish the financial soundness of their plans. Despite the help, an unknown number of plan officials have seen the writing on the wall. Concerned that no amount of relief would help them return to desired soundness, they have chosen to cap their exposure by closing their plans to new retirees.
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Tips on Social Security Claiming Strategies
Continue reading… 7 CommentsPeople nearing retirement naturally have a lot of questions about the best ways to claim Social Security benefits. Benefits can be claimed as early as age 62 but increase by 7-8 percent a year -- plus inflation adjustments -- for each year you defer claiming until the age of 70. Certain advantageous claiming strategies, especially involving spousal benefits, don't become available until you've reached what's called full retirement age -- anywhere from 65 to 67 depending on when you were born. The Social Security Web site has extensive information but unless you know what to look for, it can be a daunting encounter. Here are some recent reader questions about claiming strategies and answers from Social Security spokesperson Dorothy Clark.
[See Tips to Maximize Social Security Benefits.] -
Double-Digit Medical Expense Trend to Continue
Continue reading… 6 CommentsAs Congress gets ready to reconvene next week and take up healthcare reform, the reality of seemingly uncontrollable medical costs will be playing out once again. Despite near-zero inflation and recessionary conditions, health insurers in 2010 face another year of double-digit increases in the charges they pay for hospital services, physicians, drugs, and other healthcare costs. Premiums will rise and some health plans will raise co-pays for doctors visits, eliminate coverage of some expensive drugs and consider other ways to save money. Imagine if the auto industry decided to make its case for government support by jacking up the price of the vehicles that consumers already can't afford.
"2010 medical plan cost trends will be more than four times greater than the annual increase in average hourly earnings," the Segal Co. said in its authoritative annual review of cost trends at most of the nation's major health and drug-plan providers. For the year ended last July, it noted, wages rose by 2.5 percent. -
America Turns Inward in Tough Times
Continue reading… 1 CommentThe economic downturn has led to major cutbacks in volunteer activities, according to the 2009 Civic Health Index, an annual survey from the National Conference on Citizenship. Even among people who already have reached retirement age, 75 percent said they had reduced their volunteer activities in the past year. And the slightly younger baby boomer group was particularly hard hit. "Sandwich generation" pressures forced boomers to provide more support to their children and their parents, with traditional volunteer activities suffering as a result," the survey report said.
[See 7 Tips for Finding Right Volunteer Work.]
