The Unexpected You are getting ready to retire or are retired and you have save and invested well you and feel you’re set…but you’ve hit a bump in the road and have lost a good portion of your savings. You are not alone. Ameriprise Financial released a study on such a circumstance: • Slower asset growth due to low interest rates – 63% • Market declines caused by recession – 55% • Lower than expected home equity – 33% • Supporting grown children or grandchildren – 23% • Pension plan not as much as anticipated or discontinued – 23% • Bad investments – 22% • Began collecting social security before retirement age – 19% • Job loss – 18% • Inheritance less than anticipated – 17% • Spent a lot of money on home repairs – 15% Retirees who find themselves having to earn extra income for whatever reason may have to be creative in finding that income. Let’s you cannot return to the work that you once did, here are some ideas I came across in an article in US News: • Look for paid focus groups • Be a part of a medical study if you have a certain condition. • Be a mystery shopper. • How about tutoring. Advertise on the supermarket bulletin board or checkout a local school, or university. • Pet sitting. • Sell some items on Craigslist or ebay. • Then there is Turking. Doing small tasks that only humans can do such as writing short articles, taking surveys, transcribing. Check it out online: mechanical turk. What would they do differently: • Start saving earlier – 57% • Work harder to learn more about investing – 37% • Spend less on luxuries, eating out, vacations – 33% • Create a written retirement plan – 29% • Use credit more wisely – 25% Pay attention to your credit score, always, but in retirement as well. According to US News, here’s why: • If you go into retirement with no mortgage... very good. However, 40% of those 60 to 64 have a mortgage. Refinancing to a lower rate can help, and a good credit score is necessary. • A good credit score will help get the best rewards credit card. • Also help with lower insurance rates because the higher score translates to responsibility which can mean better rates. • Helps spot identity theft. Not paying attention can mean trouble. Check periodically to monitor activity. • And if you are going to start a second career having access to credit is essential. When can your second career be the same as your first career? Have you heard of phased retirement? It sounds pretty good. Most of these programs are not formalized resulting in little statistical information as to their popularity…but they exist and seem to be growing: • Phased retirement allows a worker to wind down hours working to part time status until retirement the retirement date. Worker must put in at least 20 hours to retain benefits. • Also a worker may retire, rollover 401k and then come back to work part time. • Its good for both company and employee. Company keeps a productive worker, and worker can dial back his/her work schedule. • Phased retirement started in Sweden in the 70’s and has gained a foothold in the U S since then. • Congress has passed a law to allow the program for federal employees. Start to do some retirement planning…sounds like a good idea. • Understand the fixed expenses you will have in retirement and be realistic about the money to which you will have access. • Understand your insurance and needs. LTC, life are they adequate. Keep up with social security, Medicare, and Medicaid. • Know where and how you will live. Earlier we looked at the Virtual Village concept for community of retirees to group their talents, professions, and expertise to help the group age in place. Also we listed the 10 healthiest states in which to live as well as the 10 least healthy states in which to retire. • Keep good records should you die unexpectedly or loose capacity to make decisions on care. Wills, health directives, trust docs, as well as user i d and passwords for online accounts. •Have your final needs planning in place. Do you wish a standard burial, cremation; maybe a crypt in a mausoleum, a niche? Having your loved deal with your final arrangements should be and can be avoided.
Posted on: Tue, 18 Jun 2013 13:39:58 +0000
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