When you determine how much income you’ll need in retirement, you may base your projection on the type of lifestyle you plan to have and when you want to retire. However, as you grow closer to retirement, you may discover that your income won’t be enough to meet your needs. If you find yourself in this situation, you’ll need to adopt a plan to bridge this projected income gap. Delay retirement: 65 is just a number One way of dealing with a projected income shortfall is to stay in the workforce longer than you had planned. This will allow you to continue supporting yourself with a salary rather than dipping into your retirement savings. Depending on your income, this could also increase your Social Security retirement benefit. You’ll also be able to delay taking your Social Security benefit or distributions from retirement accounts. At normal retirement age (which varies,...
Continue readingWealth Due to Inheritance
What is it? Introduction If you’re the beneficiary of a large inheritance, you may find yourself suddenly wealthy. Even if you expected the inheritance, you may be surprised by the size of the bequest or the diverse assets you’ve inherited. You’ll need to evaluate your new financial position, learn to manage your sizable assets, and consider the tax consequences of your inheritance, among other issues. Issues that arise in connection with an inheritance If you’ve recently received a bequest, consider the possibility that the will may be contested if your inheritance was large in comparison with that received by other beneficiaries. Or, you may decide to contest the will if you feel slighted. If you’re the spouse of the decedent, you may elect to take against the will. Taking against the will means that you’re exercising your right under probate law (governed by the statutes of your state) to take...
Continue readingPay Down Debt or Save for Retirement?
The most important decision you can make is to take action and get started now. The sooner you decide on a plan, the sooner you can begin to make progress. If you decide to prioritize paying down debt, make sure you put in place a mechanism that automatically directs money toward the debt so you won’t be tempted to skip or reduce payments. Pay Down Debt or Save for Retirement? You can use a variety of strategies to pay off debt, many of which can cut not only the amount of time it will take to pay off the debt but also the total interest paid. But like many people, you may be torn between paying off debt and the need to save for retirement. Both are important; both can help give you a more secure future. If you’re not sure you can afford to tackle both at the same...
Continue readingRetirement Income Investing: Beyond Annuities
Retirement Income Investing: Beyond Annuities One of the challenges of investing during retirement is providing for annual income while balancing that need with other considerations, such as liquidity, how long you need your funds to last, your risk tolerance, and anticipated rates of return for various types of investments. Annuities may be seen as a full or partial solution, since they can offer stable income or guaranteed lifetime payments (subject to the claims-paying ability of the issuer). However, they’re not right for everyone. A well-thought-out asset allocation in retirement is essential. While income investments alone are unlikely to meet all your needs, it’s important to understand some of the most common non-annuity investments that can provide income as part of your overall investment strategy. Bonds: retirement’s traditional backbone A bond portfolio can help you address investment goals in multiple ways. Buying individual bonds (which are essentially IOUs) at their...
Continue readingUsing A Specialist Advisor Benefits Plan Sponsors in Many Ways
Enhanced participant retirement readiness is only one of many benefits plan sponsors gain from hiring a Professional Retirement Plan Advisor. Over 95% of plan sponsors who partner with an Advisor entirely dedicated to the retirement plans business report that partnering with a Professional Retirement Plan Advisor is either “very beneficial” or “a necessity.” Advisors who work exclusively with retirement plans surpass their counterparts in the percent of clients receiving core services* such as: Assisting with the implementation of the fiduciary process Reviewing investment options periodically Making plan design recommendations Meeting participants in groups to provide retirement plan education Supporting with service provider due diligence The majority of plan sponsors who retain a Professional Retirement Plan Advisor also rely on their Advisor to provide services such as: Meeting with employees one-on-one to provide retirement plan guidance Examining plan compliance with applicable laws, regulations, and stated polices...
Continue readingProfessional Advisors Help Boost Contribution Levels
Retirement Plan Sponsor Series: Professional Advisors Help Boost Contribution Levels Retirement Outcomes plans sponsors enjoy are attributable in part to plan design changes to their Professional Advisor recommends. Design changes draw more employees into the plan and help convince them to raise contributions closer to levels needed to achieve retirement success.* Plans that work with a specialist Advisor are more successful at increasing deferrals. Among plans that partner with a Professional Retirement Plan Advisor who works exclusively with retirement plans, 83% have experienced deferral rate increases in the last two years-and one-third of those have enjoyed a deferral rate increase of 6% or more. *Retirement Advisor Council – Enhancing Retirement Readiness: Consensus on a Course of Action recommends consistent contribution levels in the rage of 10% to 16% of pay over a 30-year or 40-year career. These compelling numbers testify to the participant outcome enhancements Professional Retirement...
Continue readingRetirement Advisor Council: The Retirement Plan Sponsor
Retirement Plan Sponsor Series: Partner with a Professional Retirement Plan Advisor and Achieve Higher Participant Retirement Readiness Scores A fundamental research study of 400 employers that sponsor a 401(k) or 403(b) plan found that sponsors who partner with a Professional Retirement Plan Advisor enjoy superior outcomes in many areas. In particular, partnering with a Professional Retirement Plan Advisor entirely dedicated to retirement plans helps plan sponsors enhance the retirement readiness of employees. Professional Advisors Enhance Participant Retirement Outcomes Enhancing the retirement preparedness of plan participants is a primary objective of many plan sponsors. Increasingly, sponsors look to their Advisor and service provider to keep participants apprised of personal progress toward achieving retirement readiness. The study provides evidence partnering with an Advisor entirely dedicated to retirement plans may confer plan sponsors an edge: The vast majority of participants in plans that partner with such an Advisor receive an indicator of their personal retirement readiness. Going one step further, most sponsors partnering with an Advisor entirely...
Continue readingSocial Security Claiming Strategies for Married Couples
Deciding when to begin receiving Social Security benefits is a major financial issue for anyone approaching retirement because the age at which you apply for benefits will affect the amount you’ll receive. If you’re married, this decision can be especially complicated because you and your spouse will need to plan together, taking into account the Social Security benefits you may each be entitled to. For example, married couples may qualify for retirement benefits based on their own earnings records, and/or for spousal benefits based on their spouse’s earnings record. In addition, a surviving spouse may qualify for widow or widower’s benefits based on what his or her spouse was receiving. Fortunately, there are a couple of planning opportunities available that you may be able to use to boost both your Social Security retirement income and income for your surviving spouse. Both can be used in a variety of scenarios, but...
Continue reading
Reverse Mortgages
What are reverse mortgages? Older individuals who own their homes often find themselves “house rich and cash poor.” Developed to address this dilemma, a reverse mortgage provides funds–all at once or over time–to an older homeowner by drawing against the equity built up in the residence. Unlike “forward” mortgages, reverse mortgages are not repaid on a monthly basis. The total loan (including the accumulated interest) is repaid when the last surviving borrower sells the home, permanently vacates the property, or dies. In most cases, the funds the homeowner receives may be used for any purpose: to supplement a fixed income, to pay for at-home medical care, or to see the world. For an individual facing a retirement income shortage or an increased dependency on medical care, reducing home equity with a reverse mortgage may be preferable to selling the home to raise much-needed cash. A reverse mortgage can have drawbacks,...
Continue reading
Healthcare in Retirement
What health care benefits are available in retirement? Health care in retirement is available from many sources. Government programs (such as Medicaid and Medicare) offer numerous health care benefits. However, you may need to purchase supplemental health insurance or Medigap, as well. Most Americans are eligible to begin receiving Medicare benefits at age 65, but qualifying for Medicaid may require some planning on your part. In addition to these resources, you may also be entitled to military health care benefits if you are a veteran, retired servicemember, or the spouse or widow of a veteran or retired servicemember. Continuing care retirement communities and nursing homes also offer health care services for older individuals. Depending on your specific needs and circumstances, you may use any number of these resources during your retirement years. Medicare In general Medicare is a federal health insurance program created in 1965. Medicare primarily assists those who...
Continue reading