In the last generation, most retirees have a pension and Social Security. But today many employers have migrated from pensions to defined contribution plans. From 1985 to 2000, the rate of participation in pensions by full-time employees of medium and large private firms dropped from 80 percent to 36 percent. A 2013 survey by the Bureau of Labor Statistics found only 26 percent of civilian workers in the U.S. participated in defined benefit pension plans. The boomer generation is often referred to as the “sandwich generation,” because they are paying for their parents’ elder care as well as the tuition of their children. When you add the funding of their retirement plan, there’s not much money left to pay off a mortgage.
Presidential candidates have promised Social Security will not be altered for baby boomers, but Congress has changed things over the years. With the most recent changes coming with the passing of the Bipartisan Budget Act of 2015, most baby boomers lost income from the elimination of the “file and suspend” provision and age tested restrictive application benefits. But perhaps the biggest change and the greatest risk in retirement isn’t legislation, but living longer.
Today, the average life expectancy for men is 86.6 years and for women 88.8. The impact of longevity on retirement modeling has created an environment fear among of among seniors of outliving their money. One answer to longevity problem maybe annuities. Annuities can be structured to pay guaranteed lifetime income with annual increases. Today, more retirement plans are using guaranteed lifetime annuity income to pay for household living and travel expenses. The structured payout can cover two lives and provide income for the survivor.
Two years ago, Qualified Longevity Annuity Contracts or QLACs, were introduced. The key part of the legislation was to offer the option to defer required minimum distributions or RMDs at age 70½ to age 85 from qualified plans like 401(k)s. The rules of engagement allow deferring 25 percent of qualified plan monies not to exceed $125,000 per participant to age 85. QLACs use deferred income annuities that can guarantee income for life. Controlling RMDs with QLACs can have a significant impact on retirement taxation and may insulate a portion of Social Security income from taxation as well. Annuities are not insured by the FDIC or any government agency. So it’s important to have your financial advisor review the balance sheet and ratings of the insurance company before you purchase an annuity.
Creating cash flow every month isn’t an accident; it’s a deliberate act of spending wisely and saving for the future. Many consumers look to engage a professional adviser, because for most, managing your finances is not a do-it-yourself activity. ...
Released On: 1/21/2017
Views: 2969
Money market funds, CDs and savings accounts were the safe money havens of the past. But today, they’re crediting rates are so low, taxable and eroded by inflation. You worked hard for your money, so you need to make your money work hard for you. ...
Released On: 1/20/2017
Views: 3045
After the market meltdown of 2008, investors and savers alike want to have safe alternatives for portions of their money. Many near or in retirement just can’t afford another major downturn in the market, so conservative options need to be sought ...
Released On: 1/19/2017
Views: 3014
It doesn’t matter what game you like to plan, there are strategies and tactics to learn to become successful at any sport. The same is true of tax code. There are three basic moves to make that can positively affect the taxes due on your 1040. Wa ...
Released On: 1/18/2017
Views: 2523
Every investor should have a financial profile that includes a risk-tolerance assessment, timeline goals and a retirement or estate strategy. It becomes the reference point for all your money decisions and any plan alterations that will occur. Wa ...
Released On: 1/17/2017
Views: 2500
It’s really troubling in the information age an investor can’t seem to secure the true cost of their investments or consulting advice. Even when you Google—the front of all knowledge—most financial products disclosures don’t reveal the total cost ...
Released On: 1/16/2017
Views: 2671
Elder care in retirement is the greatest economic threat to seniors. Medical expenses and long-term care costs can exceed $220,000 for a married couple during their golden years, and living longer could increase the costs even further.
Released On: 1/14/2017
Views: 2836
The number-one concern of retirees is they may be outliving their money, but their number-one compliant is paying taxes during retirement. Focusing on taxes needs to be coordinated with the purchase investment products to determine investor suita ...
Released On: 1/13/2017
Views: 2586
Most retirees don’t focus on required minimum distributions. Some don’t even know what RMDs are. Only a few seniors have a handle on them and are aware of the penalties for not complying with the laws that govern RMDs.
Released On: 1/12/2017
Views: 2725
Retirement income just not just triggering a lifetime annuity and just setting it and forgetting it. Portfolio income needs many investment positions to generate retirement income to age 100.
Released On: 1/11/2017
Views: 2568
It is impossible to be in the advisory business, be altruistic and be profitable? Is there such an inherent conflict of interest between advisor and investor that the compensation models that exist today need to be scraped? The Department of Labo ...
Released On: 1/10/2017
Views: 2416
Many modern portfolio proponents use the risk-return theory of the efficient frontier to measure market returns against risk exposure. The goal is to optimize returns with the least amount of risk. If portfolio performance falls below the efficie ...
Released On: 1/9/2017
Views: 2651
More than ever, seniors in or near retirement are struggling to create a reasonable lifestyle in their golden years. Many have mortgages, short debt and family obligations, such as long-term care costs for their aging parents and unpaid college l ...
Released On: 1/7/2017
Views: 2740
Sooner or later most seniors will experience some type of morbidity or illness event during retirement. Some retirees live in single story homes, with limited or no steps at all. Walk-in bathtubs, nonskid tile and support bars can help, but they ...
Released On: 1/6/2017
Views: 3196
You’re probably being pummeled with Medicare literature in the mail, but what’s really covered? The topic is overwhelming, thanks to the complicated coverage policies. Watch the interview with retirement specialist Curt Chojnowski.
Released On: 1/5/2017
Views: 2608
Depending upon your risk tolerance and the state of your health, you may want to consider TAMRA compliant cash value life insurance designed for accumulation and not necessarily as a death benefit.Watch the interview with retirement specialist Cu ...
Released On: 1/4/2017
Views: 2551
Most seniors and retirement advisers focus on qualified plan monies. But there are non-qualified monies that could make the difference between experiencing retirement prosperity or retirement poverty. Watch the interview with retirement specialis ...
Released On: 1/3/2017
Views: 2514
The nations of the world continue to print money, expand their governments and obligate their taxpayers with debt they can’t repay. The world economy is so interconnected, that when the first domino falls it will cause a rippling effect of a worl ...
Released On: 1/2/2017
Views: 3278