How to max out your Social Security checks-By Philip Moeller

Social Security check

Understanding how Social Security computes benefits for full-time workers past the age of 60 may make you feel better about working into your later years.

One of the most common misconceptions I hear about Social Security is that it makes no sense to work in your later years—and keep forking over payroll taxes—because your benefits won’t rise.

For full-time workers, this is absolutely not true. Social Security uses very favorable rules for measuring wages for people age 60 and older who are still working. And older workers are a big and growing army: More than 8.2 million persons age 65 or older were in the labor force last month, up from 4.7 million 10 years earlier, according to the U.S. Bureau of Labor Statistics.

Of course, one of the main reasons people are staying on the job is because they need the money. Their retirement prospects may be bleak to boot. So understanding these Social Security rules is more important than ever.
Social Security bases your benefits on the top 35 years of your covered earnings. As used here, “covered” means wages on which you’ve paid FICA (Federal Insurance Contribution Act) taxes. There is an annual cap on wages subject to these taxes, but it goes up each year to reflect the past year’s increase in national wages. In 2015, the cap is $118,500.

Each year, Social Security indexes your wage earnings, adjusting them to reflect the impact of wage inflation. It uses these indexed wage amounts to determine your top 35 years of earnings.

This way, people get fair credit for all of their past earnings years. Otherwise, a 66-year-old who earned most of his wages 30 years ago would receive less in benefits than a 66-year-old whose earnings occurred in more recent years.

Wage indexing stops at age 60. This is a big deal. The reasons aren’t important here—what is important is that your post-60 earnings are not indexed and thus flow directly into your earnings record in their unadjusted, or nominal, form.

Because wages have increased in this country nearly every year since 1950, the odds are very good that someone who keeps working full-time past age 60 will earn enough money to represent a new “top 35 year.”

This is automatically the case for high earners whose wages exceed the annual cap. As the cap rises, so will the amount of their covered earnings, automatically becoming a new top-35 year. But even lower-earning individuals face good odds of having their post-60 earnings become new top-35 years.

When this happens, Social Security will automatically recompute not only your retirement benefits but the benefits of anyone else—a present or former spouse, young children, and even your parents—that are linked to your earnings record. And it will do this for every year in which your unadjusted earnings are large enough to become one of your top 35 earnings years.

Having said this, I share the frustration that many older workers express for continuing to fork over payroll taxes even after they’ve reached their maximum Social Security benefits. Paying something for nothing is no fun, and in this case it’s not right.

My solution, which maybe has just a constituency of me, would be to cut payroll taxes for workers who are at least 70 years old—and to cut them for their employers as well. This will still bring new taxes into Social Security, but it also will recognize the reality that these workers largely have already paid for their Social Security benefits.

Giving their employers a break will also create needed incentives to encourage hiring and retaining older workers. Right now, many employers balk at doing do, citing higher health care and perhaps retraining costs for older employees. Yet the need for this and other “aging America” changes is becoming clearer with each passing day.

Culled from Money

Five ways your financial adviser can screw up your retirement, legally -By Ben Steverman

social security

Investment advisers should act in their customers’ best interests, President Obama says. Here's how they don't, and how it can hurt you.

Right now, only some advisers are fiduciaries, required to put their clients’ needs first, while many brokers and advisers need only to recommend “suitable” financial products. On Monday, the White House said it would support a plan to change that.

Wall Street industry groups warn that new rules could raise costs and thus make advice unaffordable to many middle-income Americans. It’s not clear what the final administration proposal will look like—Labor Secretary Thomas Perez says it will be “very different” from previous proposals. But the goal is to end biased advice that the administration estimates costs investors $17 billion a year. 

Here are five ways that, under current law, advisers can put their clients at a disadvantage:
401(k)-IRA rollovers
For many workers with a 401(k) who are approaching retirement, the best option is to do nothing. Their employers offer 401(k) plans with low fees and great investment choices. There’s no reason to move the money to an individual retirement account, or IRA. But as Bloomberg’s John Hechinger reported last year, investment firms push workers to do just that. For example, federal employees are urged to shift assets into IRAs with fees that are 20 times as high as those in the Federal Thrift Savings Plan.
Load fees

When customers buy a mutual fund from a broker, they’re still often charged a front-load fee—a one-time fee that can swallow up more than 5 percent of their money before it’s invested. The proceeds from load fees help compensate advisers for their time, though there are often far more efficient ways to get advice.  More and more investors are asking for no-load mutual funds, but the Investment Company Institute estimates that $630 billion in load funds were sold in 2013, the latest data available. That was up 19 percent from 2012 and the most since 2008. 

Opaque fees

While you might notice a 5 percent load fee, many other commissions charged by advisers are hard to spot. For example, a “12b-1 fee” can be tacked on to a fund’s expenses every year, with the proceeds often going to an adviser years after he or she sold the fund. Most of these charges should be disclosed somewhere, but it can be very difficult for clients to add up all the various ways an adviser is making money off them. 

Active fund bias

In many investment categories, low-fee index funds have historically performed better than actively managed mutual funds. But when an adviser meets a client with lots of assets in index funds, he or she often urges the client to reallocate into higher-fee funds. When mystery shoppers visited advisers for a 2012 study, 85 percent were told to ditch their diversified, low-fee portfolios.

Poor performance

Commissions, including load fees and 12b-1 fees, give advisers an incentive to recommend certain investment products over others. Firms can also give advisers bonuses for steering client money into the firms’ own funds. The result of this biased advice is that investment performance suffers, academic studies show—and not just because fees eat into returns. A 2014 study compared self-directed investors with clients who received advice with conflicts of interest. The self-directed investors performed an average of 1.25 percentage points better annually. A 2009 study found that direct-sold funds beat broker-sold funds by 0.14 to 0.9 percentage point per year, even disregarding the broker funds' higher fees. Over time, that performance gap can cost you thousands, or tens of thousands, of dollars.

Culled  from Bloomberg.com

The 10 states in US with the most money stress-By Christine DiGangi

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Among the many reasons Hawaii would be a pleasant place to live, people there are pretty content with their financial situations. Living on the Hawaiian islands is by no means cheap — it costs a lot to import all the essentials — but in spite of that, Hawaiian residents feel the best about their ability to manage their finances to "reduce stress and increase security," according to the 2014 Gallup-Healthways State of Well-Being rankings.

The same cannot be said of many other warm-weather states, particularly those in the South. The 10 states with the lowest financial well-being rankings are in that region, though many rank well in other well-being categories studied in the report. The Gallup-Healthways Well-Being Index is based on interviews with 176,702 people between Jan. 2 and Dec. 30, 2014, about how they regard their daily lives. Each state receives a ranking in five categories — purpose, social, financial, community and physical well-being — which determine the overall ranking. As far as financial well-being is concerned, Hawaii, Alaska, North Dakota and Wyoming residents are feeling great. People living in these 10 states aren't as content.
North Carolina
Financial Well-Being Rank: 41
Overall Well-Being Rank: 19
It seems financial well-being is the great downfall of people living in North Carolina. It ranked in the top half of the other well-being categories, most notably at No. 8 for social well-being, which gave it the No. 19 spot overall. That's the highest composite rank of the rest of the states in the bottom 10 of the financial well-being list.

Arkansas

Financial Well-Being Rank: 42
Overall Well-Being Rank: 43
Despite being home to Wal-Mart, the country's largest company and employer, Arkansas' ranking doesn't reflect the company's slogan, "Save Money. Live Better." Its residents reported seemingly average feelings about their purpose, social and community well-being, but with a low level of financial satisfaction and the third-worst assessment of their physical well-being, Arkansans fall pretty low on the well-being index.
West Virginia
Financial Well-Being Rank: 43
Overall Well-Being Rank: 50
Financial well-being is actually one of the better aspects of West Virginians' lives — they reported better feelings only about their community (ranked 38th). West Virginia's residents reported the worst feelings of any state about their purpose ("Liking what you do each day and being motivated to reach your goals") and physical well-being ("Having good health and enough energy to get things done daily").
South Carolina
Financial Well-Being Rank: 44
Overall Well-Being Rank: 22
South Carolina residents ranked in the top 10 for purpose (8th) and social (3rd) well-being, and feelings about community and physical well-being were pretty decent (23rd and 28th, respectively). The lack of confidence in managing their finances really dragged them down in the overall well-being rankings.
Alabama

Financial Well-Being Rank: 45
Overall Well-Being Rank: 45

When compared to other states, Alabama didn't shine in any category. Its best showing came in community well-being, ranking 31st among the 50 states.

Kentucky

Financial Well-Being Rank: 46
Overall Well-Being Rank: 49
Kentucky is the northernmost state on this list. More notable, perhaps, is that its residents feel bad about their purpose, worse about their social well-being and just as bad about their physical well-being. Community is the clear winner in Kentucky — it ranked 26th.
Georgia
Financial Well-Being Rank: 47
Overall Well-Being Rank: 30
In addition to negative feelings about their finances, Georgians aren't feeling great about their community (37th). The other three areas are average or a little better.
Louisiana

Financial Well-Being Rank: 48
Overall Well-Being Rank: 40

People in Louisiana do not lack a sense of purpose — they took the No. 9 slot on that scale — but everything else lags behind, particularly the financial well-being of its residents.

Tennessee

Financial Well-Being Rank: 49
Overall Well-Being Rank: 44

People in Tennessee seem to feel best about their communities (28th), though that's not saying a lot, considering the three areas in which it's among the bottom 10 states: physical (42), social (44) and financial (49).

Mississippi

Financial Well-Being Rank: 50
Overall Well-Being Rank: 46

At first glance of the overall Well-Being index, it was nice to see Mississippi wasn't at the bottom. Mississippi tends to end up at the bottom of a lot of state rankings lists, much to the chagrin of its citizens. Of course, looking at the individual well-being areas, there was bound to be one. Mississippi residents seemed to be the most stressed about their economic conditions, though the state ranked 22nd in the purpose category. (It was in the bottom 10 in the remaining categories.)

Culled  from Credit.com

3 Worst Places to Retire in Nigeria- Odunze Reginald C

A retiree should not be spending his golden years worrying about bills, the major determinants of  the best cities to retire in Nigeria  is off course the cost of living but events of the recent situation has come to  place the security situation as a major determinant  when choosing retirement destinations in Nigeria. Other criteria include cost of accommodation, hospitality of the people and now recently religious tolerance.

Others include availability of natural resources, good weather and favorable climatic condition but also Strength of the job market. Retirees often tend return to the job market because their pension was not enough to carry them through their golden years, or some may have been involved in one relationship or the other that creates more avenue for expenditure.

But   a close observation indicates that the majority of the retirees wish to retire in the village because of the peace they desire and the low cost of living in those villages, but they often discover that the peace they desire  eludes them in the village, as they discover that politics, land tussle and other issues came up to scuttle  the desired peace during retirement.

But be as it may the worst places to retire in Nigeria are as follows:

1MAIDUGURI

 

 image credited to premiumtimesng.com

Maiduduri used a to a relative peaceful state but all that has change with the advent of Boko Haram. The sate has known no peace, visitors are afraid to come to this state , even the real owners of the state are afraid to stay. Chibok girls  kidnap, Sambisa occupation is not making things easy.

2YOLA

Yola is also having thesame with maiduguri, business is now at sandstill, people are afraid  to stay in this state and the impact of Boko Harm is also devastating in this state

3 DAMATURU

 Image credited to channels

 The impact of Boko Haram has devastated the state , business no longer exist in this state. This clearly shows the impact of security on the life of the individual and the state.

The joint forces of African Union, West African forces and Nigeria Armed forces are battling to free these states from the strong grip of Boko Haram, and until they are fully liberated, these cities remain the worst to retire.

 

Culled from reginaldodunze.com

Has the trend toward later retirements played out?-By Alicia H. Munnell

Since working longer is the key to a secure retirement for the vast majority of older Americans, it is useful to take a look at recent labor force trends. From the beginning of the 20th century, labor force participation of older men had declined steadily until the mid-1980s, when it gradually began to increase. As a result, for men the average retirement age—the age at which the labor force participation rate drops below 50%—has slowly increased from a low of 62 in 1985 to about 64 in 2008, where it has since held steady.

Reporting trends in the average retirement age for women is more complicated, because women’s work patterns reflect both their increasing labor-force participation over time and the factors that affect retirement behavior. Nevertheless, using the same measure for women as men, their average retirement age reached about 62 in 2008, where it still remained as of 2013.
Several factors have contributed to the rise in the retirement age since the mid-1980s.
Social Security. Changes made work more attractive relative to retirement. The liberalization, and for some the elimination, of the earnings test removed what many saw as an impediment to continued work. The delayed retirement credit, which increases benefits for each year that claiming is delayed between the “Full Retirement Age” and age 70, has also improved incentives to keep working.
Pension type. The shift from defined benefit to 401(k) plans eliminated built-in incentives to retire. Studies show that workers covered by 401(k) plans retire a year or two later on average than similarly situated workers covered by a defined benefit plan.
Education. People with more education work longer. Over the last 30 years, education levels have increased significantly.
Improved health and longevity. Life expectancy has increased, and evidence suggests that people may be healthier as well, particularly those with higher socioeconomic status. The correlation between health and labor-force activity is very strong.
Less physically demanding jobs. With the shift away from manufacturing, jobs now involve more knowledge-based activities, which put less strain on older bodies.
Joint decision-making. More women are working, wives on average are three years younger than their husbands, and husbands and wives like to coordinate their retirement. If wives wait to retire until age 62 to qualify for Social Security, that pattern would push husbands’ retirement age toward 65.
Decline of retiree health insurance. Combine the decline of employer-provided retiree health insurance with the rapid rise in health-care costs, and workers have had a strong incentive to keep working and maintain their employer’s health coverage until they qualify for Medicare at 65. (This incentive may be reduced somewhat by the Affordable Care Act, which is designed to make it easier for individuals to obtain health insurance on their own.)
Non-pecuniary factors. Older workers tend to be among the more educated, the healthiest, and the wealthiest. Until recently, at least, their wages were lower than those earned by their younger counterparts and lower than their own past earnings. This pattern suggests that money may not be the only motivator.
These factors all explain the gains since the mid-1960s. The interesting question is whether they have played themselves out or whether the increase in labor force activity will rebound.

Culled from money watch

Attending a little bit of college is worse than not going at all-By Akane Otani

Students celebrate at the commencement of the 2014 New York University graduation ceremony at Yankee Stadium on May 21, 2014 in the Bronx borough of New York City. Janet Yellen, Chair of the Board of Governors of the Federal Reserve System, received an honorary doctorate and was the 2014 commencement speaker. (Photo by Andrew Burton/Getty Images)

 

 

The recession took a bite out of earnings for all workers—but people who made an unsuccessful attempt at college were hurt the most. Those who’ve completed some college have seen their paychecks shrink the most compared with all groups of workers since 2007, a new report shows.
The report, released on Thursday by the Economic Policy Institute, analyzed data from the U.S. Bureau of Labor Statistics and found that real hourly wages for workers who started, but didn’t finish, college declined 5.9 percent from 2007 to 2014. That’s worse than the dip for workers who didn’t graduate high school (5.2 percent decline), those who graduated high school (3.7 percent), and those who graduated college (2 percent). The only group whose wages have bounced back to 2007 levels are workers holding advanced degrees. Even so, their recovery has been modest at best: The EPI says advanced degree holders’ real hourly wages are now sitting merely at 2007 levels.

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With the exception of advanced degree holders, every group of workers -- ranging from those who haven't completed …

“Wage inequality has increased steadily, yet even those with a college diploma or advanced degree have experienced lackluster wage growth far behind the growth of productivity,” the report says.
Lackluster numbers aside, the institute didn’t warn people off of going to college. “The data do show that college graduates have fared slightly better than high school graduates since 2007,” according to the EPI report. That’s consistent with what economists have said time and time again. College graduates—especially those saddled with debt—may be pessimistic about the return on investment from their degrees, but the numbers have shown that completing college pays off. The average college graduate will earn $500,000 more over a lifetime than workers who only finished high school, my colleague Natalie Kitroeff reported last week.

A minor caveat: The wage premium applies only if you finish college. So those who may not be able to finish school might be better off not starting.

Culled from Bloomberg.com

Are These Nagging Retirement Issues Keeping You Awake at Night?-Eric McWhinnie

 

Source: Thinkstock

Money will buy you a bed, but not necessarily a good night’s sleep. Retirement confidence varies from person to person, but a new survey finds that the majority of Americans share the same worries about their financial futures.

Health and wealth are at the forefront of restlessness. According to Bankrate.com, 28% of Americans say high medical bills are their top financial concern about retirement. Making matters worse, higher income provides little comfort. Households making more than $75,000 are actually more worried about medical expenses than the overall population. Meanwhile, 23% of Americans say running out of savings is their biggest financial concern, followed by 18% who say unaffordable daily expenses. Eleven percent of Americans are most worried about having too much debt in retirement.

Working Americans also have humble expectations for Social Security. One in four respondents believe they won’t receive anything from the government program, and only 27% expect to receive at least half of their retirement income from it. This is not too surprising, given the current status of Social Security. In 2014, more than 59 million Americans received almost $863 billion in benefits. Without some type of reform, benefits will need to be cut by 23% in aggregate in 2033. In other words, after the depletion of reserves, continuing tax income is expected to be sufficient enough to pay 77% of scheduled benefits in 2033.

“The average Social Security payout is only around $15,000 per year, so people are realistic to think they’ll need to supplement that income,” said Sheyna Steiner, a senior investing analyst at Bankrate.com, in a press release. “But despite all the gloom and doom about the future of Social Security, most Americans are optimistic that they’ll get at least something from the program. That even includes millennials — 63% of them think Social Security will fund at least some of their retirement several decades from now.”

A combination of low savings and high medical bills may result in higher debt loads for retirees. A separate Bankrate report released last year found that 25% of Americans have more medical debt than emergency savings. That figure nearly doubles to 44% among people earning less than $30,000 per year. Even people who do not currently have medical debt are plagued by the thought of it. The report also finds that 55% of respondents were either very or somewhat worried they will become overwhelmed by medical debt at some point in the future.

Medical bills are such a burden to Americans that the nation’s most popular credit score provider is revising its model. FICO will change its calculations so medical collections will have a lower impact on credit scores, making it easier for consumers to obtain loans. The median FICO score for consumers whose only major negative references are medical collections will increase by 25 points. Experian estimates that more than 64 million Americans have a medical collection on their credit reports.

Culled from wallstreetcheatsheet

National Assembly Completes Amendment For Life Pension For Past Leaders

The National Assembly has completed the amendment of the 1999 Constitution, where life pension was approved for anybody who has been President or Vice President, Senate President or Deputy Senate President, Speaker or Deputy Speaker of the House of Representatives.
Funny thing is, they did this while Nigerian troops were at war with Boko Haram insurgents.
The only clause in the amendment is that beneficiaries of the pension must be those who successfully concluded their terms in office without removal or impeachment.
The amended constitution was presented as motion to the floor of the Senate by the Chairman, Senate Committee on the Review of the 1999 Constitution, Senator Ike Ekweremadu, for transmission to the president for approval.
The amendment also made it mandatory for the president to appear once a year before the joint sitting of the National Assembly to deliver an address in respect of the state of the nation.
The amended Clause read: “Any person who has held office as President or Deputy President of the Senate, Speaker or Deputy Speaker of the House of Representatives, shall be entitled to pension for life at a rate equivalent to the annual salary of the incumbent President or Deputy President of the Senate, Speaker or Deputy Speaker of the House of Representatives, provided that such a person was not removed from office by the process of impeachment or for breach of any of the provisions of this Constitution.”
“The president shall attend a joint meeting of the National Assembly once a year to deliver an address in respect of the state of the nation. He may attend any joint meeting of the National Assembly, either to deliver an address on national affairs including fiscal measures, or to make such statement on the policy of government as he considers to be of national importance.”
(360NOBS)
Culled from the sun newspapers/360NOBS

Retirement-account standards may tighten-By Andrew Ackerman

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WASHINGTON—Brokers who recommend retirement-account investments would have to put their clients’ interests ahead of personal gain under rules expected to be endorsed by the Obama administration as soon as next week.

At present, the brokers’ recommendations for 401(k) plans and other retirement accounts generally have to be “suitable,” a weaker standard that critics say permits high fees that eat into investors’ returns.

A White House announcement of the so-called fiduciary rules is expected to generate significant pushback from Wall Street, which says it already faces robust regulation and warns the rules’ likely costs could make it uneconomical for brokers to serve lower-balance accounts. It likely would take several additional months for the Labor Department, which is drafting the rules, to collect public feedback before it can move to implement the rules.

The administration is concerned investors aren’t aware that brokers benefit financially by selling products that may not be in a client’s best interest but still rise to the lower standard of being suitable investments.

“The current regulatory environment creates perverse incentives that ultimately cost savers billions of dollars a year,” Jason Furman, chairman of the White House Council of Economic Advisers and CEA member Betsey Stevenson, wrote in an internal memo last month.

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The White House memo argues that investors lose as much as $17 billion annually in retirement dollars—or “at least” 5% to 10% of their retirement savings over 30 years—because of “excessive fees” and “conflicted” advice—amounts disputed by the industry.

“We think the data and studies are less than conclusive and in many cases dated,” said Kenneth Bentsen, president and chief executive of the Securities Industry and Financial Markets Association. “It’s designed to cast aspersions on the broker model,” he added.

The potential for so-called fiduciary rules has triggered debate over the past five years, pitting brokerage firms against investor advocates over the way in which retirement accounts are sold to investors.

The standards, if finalized, could end up cutting into payments brokers and others collect from mutual-fund and insurance companies when they sell plans to retiree clients. Brokers have pushed back against stricter rules, warning they will drive up costs and reduce retirement choices.

The rules are expected to be more flexible than a 2010 proposal the Labor Department withdrew amid an outcry from Wall Street, which complained it would have barred many routine payments to brokers, including commissions.

They won’t bar commissions for those who sell retirement investments but would ensure brokers and other financial professionals have an overriding responsibility to keep their clients’ best interests when giving financial advice.

The proposal is expected to address what critics view as loopholes in existing law that allow brokers to skirt a fiduciary duty, such as when they only provide one-time, as opposed to ongoing, advice or by saying their recommendations weren’t the basis of an investor’s decision to buy an investment product. The proposal is also expected to tighten fiduciary rules to advice provided to individuals looking to roll over 401(k)s into individual retirement accounts when they leave a job or retire.

Industry groups and some lawmakers have urged the Labor Department to wait until the Securities and Exchange Commission decides on its own definition of a fiduciary standard for investment advisers and brokers working with mom-and-pop retail investors. The SEC, under the 2010 Dodd-Frank law, gained authority to write such standards but isn’t required to do so. The agency’s efforts apply broadly to advice about securities like stocks and mutual funds but not to workplace retirement plans.

The SEC has consulted with the Labor Department on the rules, and SEC Chairman Mary Jo White and Labor Secretary Tom Perez have met at least twice to discuss the department’s proposal, according to people familiar with the matter.

Labor Department officials declined to spell out details of the proposal. But the measure is expected to soon advance to the White House Office of Management and Budget for review, after which it would be subject to public comment.

Culled from Wall Street Journal

10 surprising facts about retirement-By Emily Brandon

Thinkstock

Most retirees are prepared for more free time and less stress, but some other aspects of retirement could be unexpected. Many retirees have significant financial worries and health concerns, and an excess of free time is only fun if you use it well. Here are 10 ways retirement might surprise you.

It can be difficult to spend down your savings. After decades of accumulating enough money to retire, it can be psychologically and emotionally challenging to spend down that money and watch your nest egg get smaller each year. "They are going to feel like they spent a lifetime accumulating this pile, and the idea of spending this down is just repulsive to them," says Alicia Munnell, director of the Center for Retirement Research at Boston College and co-author of "Falling Short: The Coming Retirement Crisis and What to Do About It." "For anyone who is retiring, I would give them permission to spend their money," she says.

You still need investment growth. Saving enough to retire is not your final goal. You should also develop a plan to make that money last the rest of your life. "You need to understand how you can minimize your risk in the portfolio, but you also need a component of that strategy that gives you growth because you need to stay ahead of inflation and taxes," says Laura Mattia, a certified financial planner and wealth management principal for Baron Financial Group in Fair Lawn, New Jersey.

Many retirees rely on Social Security. Social Security is a significant source of income for most retirees. Almost all retirees (86 percent) receive income from Social Security, and Social Security payments make up at least half of the retirement income of 65 percent of retirees and comprise 90 percent of retirement income for over a third (36 percent) of retirees. "Most seniors do not have much income other than Social Security," says Nancy Altman, co-director of the Strengthen Social Security coalition and co-author of "Social Security Works! Why Social Security Isn't Going Broke and How Expanding It Will Help Us All." The average monthly retirement benefit was $1,282 in December 2014.

Medicare doesn't cover everything. High medical care bills don't go away once you qualify for Medicare. Although Medicare covers a large amount of the medical treatments older people need, there are several popular services that it doesn't. For example, Medicare won't cover routine eye exams, eyeglass, dental care or hearing aids. And Medicare only covers up to 100 days in a nursing home. Retirees who require additional long-term care will need to find another way to pay for it. And while many preventive care services are covered by Medicare with no cost-sharing requirements, if something concerning is found, additional tests and procedures will be considered diagnostic and copays and coinsurance are likely to apply. "You really need to understand what health benefits you can receive from Medicare and check how it will cover any ongoing health issues," says Christopher Rhim, a certified financial planner for Green View Advisors in Norwich, Vermont.

You might spend a lot of time alone. Without a job to go to every day, you could find yourself spending an increasing amount of time alone. Some 44 percent of Americans ages 65 and older live alone, according to U.S. Census Bureau data. Unless you sign up for a volunteer position or make an effort to socialize on a regular basis, you could become bored and lonely.

Many retirees are dating. If you outlive your spouse or divorce, you might find yourself single again in retirement. While just over half (55 percent) of Americans age 65 and older are married, the rest are widowed (28 percent), divorced (12 percent), separated (1 percent) or never married (5 percent), according to census data. Some of these single seniors begin meeting new people and dating. There are a variety of online dating services that cater specifically to people over 50.

Moving can be difficult. As attractive as it sounds to move to the Sunbelt, most retirees don't relocate for retirement. Only 5.7 percent of Americans age 65 and older moved to a new residence between 2009 and 2013, and the people who do move most often relocate to the same state and even the same county, the Census Bureau found. Only 1 percent of retirees moved to a new state, and just 0.3 percent went overseas. Relocating to a new community in retirement often means leaving behind family and a support system that can be difficult to rebuild in a new place.

You will need help from others. While the act of aging is an expected part of retirement, the loss of independence typically isn't as welcome. There may come a time when you can't drive, shovel your own walkway or climb on a chair to change a light bulb. You may even eventually need help with meals and bathing. Although the beginning of retirement is often full of fun and adventures, it's also a good time to make contingency plans for later down the road when you might not be able to care for yourself.

Retirees watch a lot of TV. Retirees spend over half of their leisure time watching TV. Seniors ages 65 to 74 tune in for 3.92 hours on weekdays, and those 75 and older watch TV for an average of 4.15 hours each day, according to the 2013 American Time Use Survey by the Bureau of Labor Statistics.

You won't need to hurry. Compared to the overall population, retirees ages 65 to 74 spend extra time lingering over meals, working on home improvement or garden projects and shopping, the American Time Use Survey found. Retirees also spend more time reading, relaxing and volunteering than younger folks.

Culled from US News

The Retirement Secret Nobody is Talking About-Eric McWhinnie

Source: Thinkstock

If it takes money to make money, then it takes patience to build wealth for retirement. In fact, patience is the ultimate secret when it comes to saving for retirement. While it certainly hasn’t been easy in recent years, investors who were patient during the credit meltdown and didn’t deviate from their long-term strategies are reaping financial benefits.

In the wake of a historic bull market, retirement accounts finished 2014 at all-time highs. The year-end average 401(k) balance at Fidelity reached $91,300, its highest level in history and up 2% from the prior year. Employees who have been active in their 401(k) plans for the past decade have seen their balances rise to an average of $248,000, Fidelity reported in a new analysis. Meanwhile, the average balance in a Fidelity Individual Retirement Account reached $92,200, up 4% year-over-year.

The path to record retirement balances is not unblemished. Investors have endured back-to-back financial bubbles, dismal employment conditions, and unprecedented actions by the Federal Reserve and other central banks that are still ongoing in order to aid the weakest economic recovery in modern history. Nonetheless, retirement savers are focusing on their futures. The average 401(k) contribution at Fidelity grew 4% to $9,670 last year, while the average savings rate climbed to its best level since 2011.

“We continue to see American workers take positive steps when it comes to saving for retirement,” said Jim MacDonald, president, Workplace Investing, Fidelity Investments. “However, it’s important to remember to take a long-term approach to retirement savings, and not react to short-term market swings. The typical American worker will see markets go up and down many times during their career, so commitment to a long-term savings and investing strategy will put individuals in the best position to meet their retirement goals.”

A million dollars is not what it used to be, but it’s still a nice milestone for savers. At the end of 2014, Fidelity had 72,379 401(k) accounts with a balance of $1 million or more. That is up from 59,174 accounts in 2013, and only 20,836 accounts in 2009. Fidelity notes five common habits of millionaire account holders: start saving early in life, contribute a minimum of 10% to 15%, meet employer match, diversify stock holdings, and avoid cashing out when changing jobs.

A variety of excuses keep millions of people from placing money aside for retirement, but in the end, nobody cares about your financial future as much as you. The earlier you start educating yourself and save for retirement, the better off you will be.

Culled from wallstreet

RETIREMENT AND THE URGE TO SPEND INDISCRIMINATELY - Odunze Reginald

In The Millionaire Next Door, authors Thomas J. Stanley and William D. Danko find that millionaires were more likely to drive a Ford than a Lexus or Mercedes.
“Many affluent respondents take joy in driving vehicles that do not denote so-called high status. They are more interested in objective measures of value. Some millionaires do spend considerable dollars for top-of-the-line luxury automobiles. But they are in the minority.”

But is it wise to embark on frivolous spending especially during retirement, from the little experience and my encounters with retirees spanning a period of seven years, I discovered that those retirees on frivolous spending usually end up miserable. There is that urgent desire to spend , and climb to the next of social mobility.

People according to psychology have fantasy of what they desire in life, they may tend to overlook it if there is no money, but immediately money comes in they tend to express their desire in their purchases. And as Prof Pat Utomi 2008 in “The Limit of lets share Economy, he stated that like people who won lottery, they often return to poverty.

According to Emily Brandon in an article captioned   “8 tips for people who will retire in 2015-Emily Brandon”  “What you decide to do in retirement will have a big impact on your costs and quality of life.  "Certainly you will spend less on gas and don't have to spend as much on work clothes, but some people are also going to spend more money now because they have the time and don't just want to sit around the house," says Craig Schmith, a certified financial planner in Durham, North Carolina. "If you've got pent-up demand to travel, especially internationally, and you haven't had time to do that, you need to think about budgeting that in."

What then should a retiree do during retirement? He should be very careful in his expenditures, he should be knowledgeable in financial planning , been able to identify assets and liabilities and making the best use of his time in profitable venture.

Culled from reginaldodunze.blogspot.com

The Retirement Secret Nobody is Talking About-Eric McWhinnie

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Source: Thinkstock

If it takes money to make money, then it takes patience to build wealth for retirement. In fact, patience is the ultimate secret when it comes to saving for retirement. While it certainly hasn’t been easy in recent years, investors who were patient during the credit meltdown and didn’t deviate from their long-term strategies are reaping financial benefits.

In the wake of a historic bull market, retirement accounts finished 2014 at all-time highs. The year-end average 401(k) balance at Fidelity reached $91,300, its highest level in history and up 2% from the prior year. Employees who have been active in their 401(k) plans for the past decade have seen their balances rise to an average of $248,000, Fidelity reported in a new analysis. Meanwhile, the average balance in a Fidelity Individual Retirement Account reached $92,200, up 4% year-over-year.

The path to record retirement balances is not unblemished. Investors have endured back-to-back financial bubbles, dismal employment conditions, and unprecedented actions by the Federal Reserve and other central banks that are still ongoing in order to aid the weakest economic recovery in modern history. Nonetheless, retirement savers are focusing on their futures. The average 401(k) contribution at Fidelity grew 4% to $9,670 last year, while the average savings rate climbed to its best level since 2011.

“We continue to see American workers take positive steps when it comes to saving for retirement,” said Jim MacDonald, president, Workplace Investing, Fidelity Investments. “However, it’s important to remember to take a long-term approach to retirement savings, and not react to short-term market swings. The typical American worker will see markets go up and down many times during their career, so commitment to a long-term savings and investing strategy will put individuals in the best position to meet their retirement goals.”

A million dollars is not what it used to be, but it’s still a nice milestone for savers. At the end of 2014, Fidelity had 72,379 401(k) accounts with a balance of $1 million or more. That is up from 59,174 accounts in 2013, and only 20,836 accounts in 2009. Fidelity notes five common habits of millionaire account holders: start saving early in life, contribute a minimum of 10% to 15%, meet employer match, diversify stock holdings, and avoid cashing out when changing jobs.

A variety of excuses keep millions of people from placing money aside for retirement, but in the end, nobody cares about your financial future as much as you. The earlier you start educating yourself and save for retirement, the better off you will be.

Culled from wallstreetcheatsheet

Getting remarried may affect Social Security-Jim Blankenship

(Photo: Thinkstock)

Social Security has a way of making your life decisions difficult. When divorce and remarriage enter the picture, things get very complicated.
The earliest age you can start claiming Social Security benefits is 62. You can also delay taking benefits to any age. If you wait until your full retirement age, which is 66 for the current crop of Baby Boomers, you receive a larger benefit. If you can get by without the monthly benefits for a few years longer, delaying further to 70 results in a maximized benefit for you.
What complicates the matter is the spousal benefit. When you're eligible for a spousal benefit, you may take all available benefits (your own and the spousal) at 62 at reduced amounts. Or, if timing is right, you can take your own benefit early and then add the spousal benefit later.
Another choice is to claim the spousal benefit when you reach your full retirement age and maximize your own benefit by waiting until 70.
Since your spouse must file for benefits before you can claim spousal benefits, whether all of these options are available to you depends on your spouse's age.
Complicating matters further, what if you're divorced and are now considering a remarriage? If you remarry, you are no longer eligible for any spousal benefits based on your ex-spouse's record.
This brings up a set of difficult scenarios. You have this new person in your life, but it might be financially advantageous for you to remain unmarried. But if you're not married, you cannot provide future spousal benefits and survivor benefits for your new love.
I recently dealt with the same situation. Carol, 62, divorced Bob several years ago after a 20-plus-year marriage. Bob, 10 years her senior, has a Social Security record that would provide a significant spousal benefit for Carol - $12,000 per year if she takes it at 66, her full retirement age. She will claim her own benefit at 70. By then it'll be considerably larger, roughly $31,680 per year.
This had been Carol's plan all along, but then she met Ted, and they were considering getting married. However, Ted has a much smaller Social Security benefit coming to him, around $6,000 per year. A spousal benefit based on Ted's record would only amount to $3,000 per year. Plus, he's eight years younger than Carol.
If she marries Ted, Carol cannot receive a spousal benefit based on his record at 66. She also loses the spousal benefit from Bob's record. But if they don't get married, Ted would not be able to receive the spousal and survivor benefit based on Carol's record.
My recommendation to the couple is to delay the marriage until she's 70, and at the same time, purchase a 10-year level term life insurance policy that is worth the total amount of survivor benefits for Ted.
This way, Carol can receive the spousal benefit based on Bob's record when she reaches 66 and continue to receive it for four years until she's 70. For Ted, the insurance policy provides him with a future income resource if Carol passes away before they marry. Ted would be eligible for the spousal and survivor benefit based on Carol's record one year after the marriage.
In addition, Carol and Ted can get married at any time after Bob dies. Since Carol is over 60, a remarriage doesn't jeopardize her eligibility for the survivor benefit based on his record.

Culled from Advice IQ IN US Today

Why I’m spending $143 on Valentine’s Day - By Rick Newman

Nobody has a knack for turning a modest expression of affection into a spending orgy the way America does.

To cultivate love and romance (and, perhaps this year, bondage), Americans will spend about $19 billion on Valentine’s Day paraphernalia to express what mere words and gestures can’t: I love you! So here, pig out on chocolate! We do this to honor the ancient tradition of obeying marketers when they tell us to spend money.

This midwinter festival of love apparently dates to the imprisonment, torture and beheading of a Roman priest named Valentine in the third century. Isn’t that romantic? Valentine served under the emperor Claudius II, aka Claudius the Cruel, who banned marriage as a way of freeing young men from the clutches of women so they’d be easier to conscript into the army. Valentine found this appalling and performed marriages in secret, until the emperor busted him and had him executed on February 14, 270 A.D.

There are a few competing Valentine’s Day creation myths, including a pagan ritual called Lupercalia in which priests slaughtered some animals and cut strips of skin they handed out to young men. The men would then chase women to tap them with one of the skins, which would supposedly render the women fertile. What the tappers and tappees did after that didn't make it into the encyclopedia entry on the festival, but at any rate, in 496 A.D. Pope Gelasius consolidated various love festivals by declaring February 14 St. Valentine’s Day, trumping all other celebrations. Russell Stover stock rose 40% in one day.

For centuries, lovers celebrated Valentine’s Day by exchanging handwritten missives or small tokens of affection. Then, in the 1840s, an American businesswoman named Esther Howland ruined everything by mass-producing Valentine’s Day cards with pat, pre-printed messages, freeing people from coming up with their own thoughts. The trend caught fire, fueled by the rise of America’s mighty consumer class and the outsourcing of self-expression to wannabe novelists working for greeting-card companies.

Cards alone no longer represent a sufficient expression of devotion, of course, which is why consumers this year will spend more on jewelry than on anything else, according to the National Retail Federation, a trade group founded by St. Valentine’s ancestors.

The next biggest spending category after jewelry is movies and restaurants, which is how the truly smitten spend their money, since anybody willing to spend twice as much as usual on a rushed restaurant meal hustled out by cranky, overworked waiters in a jam-packed steakhouse has truly some new pleasures proved.

The rest of this year’s Valentine’s haul will be spent on flowers, candy, clothing, pet treats and teacher bribes. The average person celebrating Valentine’s Day this year will spend $142, which is 6.3% more than last year, according to the NRF. Wages have only risen by about 2% during the last 12 months, so we’re spending more of our hard-earned pay expressing our love for each other and less on disagreeable stuff like gasoline. If the trend holds, eventually we’ll spend 80% or 90% of everything we earn on love, and the rest on Halloween.

The NRF, which is funded by the retail industry, helpfully tallies up spending per person so that if you’ve only picked up a fine wine or a bottle of perfume for your honey, you know exactly where you stand—about $100 short. The retail federation doesn't mean to get involved in your love life, but look--you need to spend more. And that $142 will merely make you a mediocre Valentinian, by the way. Since I consider myself above average, I’ll be spending at least $143 on love symbols this year. And I aspire to become a true loverachiever—one of those guys who spends $10,000 or more on a forest of flowers for his perfect mate, because she's worth it. Maybe I’ll have mine delivered by helicopter.

You might be thinking: Can’t we do something more “useful” with that $19 billion, such as eradicate Ebola, purchase enough food to feed 10 million refugees for 5 years, or send everyone in Boston to Florida until summer? Well, sure, if you want to be a buzzkill. You'll be allied with a small group of Japanese Marxists who plan to march in Tokyo on Valentine's Day to protest "oppressive chocolate capitalists," as they describe V.D. revelers on their Web site.

Most Japanese will ignore them as they practice passion capitalism, just as we Americans will undoubtedly support our own Valentine's Day economy. Merchants need that $19 billion, because transferring money from people’s bank accounts to retail cash registers is what keeps the U.S. economy humming. If you take on debt to finance your Valentine’s Day extravaganza, even better, because that will keep desperately needed money flowing to the beleaguered financial sector, which is “under assault” from loveless (and unloved) regulators.

One curious thing about Valentine’s Day: If you run through the NRF’s math, it takes about 133 million people spending $142 per person to rack up $19 billion in spending. But there are 245 million Americans over 18, which means 112 million heathens don’t celebrate Valentine’s Day at all, leaving it up to the rest of us to Keep Love Alive. They don’t know what they’re missing.

Culled from Yahoo Finance