With unemployment at all-time lows, now might be the best time for you to be looking for a full-time job. The challenges, however, are greater if you’re over 50 years old.
According to data compiled by the U.S. Department of Labor, Bureau of Labor Statistics, on average it takes those 55 to 64 two weeks longer to find a job compared to those 20 years and older. (The news is worse if you’re 65 and older, where this average duration of unemployment is 10 weeks longer.)
It seems the idea of early retirement hasn’t caught on with those in their 50s (and even beyond).
“Our research shows that experienced workers are staying on the job longer or looking for a job for two reasons,” says Susan K. Weinstock, Vice President, Financial Resilience Programming at AARP. “Financially, they need the money, and, secondly, they like their job and find it fulfilling and want to keep working.”
Bankrate regularly surveys workers regarding their financial circumstances. Its data confirms what AARP found for those working well past age 50.
“When Bankrate asked Americans who were neither retired nor permanently disabled about their retirement savings, more than half said they were behind where they should have been,” says Mark Hamrick, Senior Economic Analyst at Bankrate.com. “For members of Generation X (age 39-54), the percentage was 63% and Boomers (age 55-73), 54% said they were behind on their retirement savings. No doubt many people who would otherwise be candidates to retire seek to remain in the workforce because they feel they need income, or to further boost their savings. Others may choose to work as a means of remaining engaged and active.”
If you’re like many older workers, you may prefer to retain your current position. But what if your present employer can’t accommodate you? It may have been decades since you last tried to look for a new job. What has changed since then? What do you have to do different today to land full-time employment?
Bryan Zawikowski has been a recruiter for 25 years and is the vice president and general manager of the military transition division for Lucas Group. Forbes ranked Lucas Group as one of the top 10 executive search firms in the nation in 2019. Zawikowski’s team works with many people who find themselves either changing careers or looking for new jobs later in life. He shares the following advice:
“What are best practices?”
· To thine own self be true: “Don’t try to hide your age. It doesn’t work, and you end up looking either vain or foolish—maybe both.”
· Polish up your online presence: “Your LinkedIn profile should be very professional, including the photograph.”
· Emphasize your real-world experience: “No ‘functional’ resumes. They end up in the trash.”
· Brevity is the soul of wit: “Maximum 2-page resume. The further back in your work history you go, the less detail there should be.”
“What are the easiest ways to make it happen?”
· Recalculate: “Be financially prepared to take a step back in compensation (either scale back your lifestyle or be prepared to dip into savings if need be).”
· Re-calibrate: “Be emotionally and mentally prepared to work for someone younger and perhaps more talented than you.”
· Circulate: “Network with former classmates, former work colleagues, friends and acquaintances that know something about your desired career path.”
· Captivate: “Have a GREAT story about why you are interested in this new career field and why you’d be good at it.”
“What are the do’s and don’ts?”
· DO something you enjoy: “Pick a career that you are really into, something that energizes you and somewhere you look forward to going to work most days.”
· DO maintain your health: “Stay physically active. You don’t have to be a marathon runner, but do something to keep your energy level up.”
· DO continue to learn: “Read as much as you can about your new career field.”
· DON’T lie: You can’t “pretend to be an expert at something just because you were good at something else.”
· DON’T assume the status quo: You’ll be disappointed if you “think you will be able to make a lateral move from where you are in your current career field.”
· DON’T be unrealistic: You’ll only hurt yourself more if you “sacrifice more than you can afford to in terms of compensation. Retirement isn’t too far away and you don’t want to jeopardize that.”
You are the master of your own destiny. If you want to find a job, you can. No matter what your age.
I am a nationally recognized award-winning writer, researcher and speaker. Among the seven books I’ve written include From Cradle to Retire: The Child IRA, Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort, and A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, I appear regularly in the national media. A “parallel” entrepreneur, I’m actively running a handful of small family-owned businesses, so I have hands-on experience on the things I write about. A trained astrophysicist, I hold an MBA and have been designated a Certified Trust and Financial Advisor. I invite you to share your thoughts and story ideas with me through my web-site, email, or any of the usual social media platforms whose links appear below.
Investors have been buying fixed annuities for a long time now for the added security they can offer. The current best interest rate on a five-year fixed annuity is 3.9% compared to the current 2% rate of a bank CD.
Fixed index annuities are paying income streams with a guaranteed rate as high as 6% over much longer time periods. These annuities earn their interest from participation with stock or bond market indexes. When the market is up, you earn a percentage of the gain in what is known as a participation rate strategy.
An example might be if the chosen index were up 10% for the year and your contract paid 70% participation, you would earn 7%. If the index selected should go down 10% for the year, you are guaranteed not to have any market losses ever. There are additional strategies for index annuities to pay interest, and each strategy has its limitations compared to the actual index earnings. As always, make sure you read the fine print.
In addition to guarantees and income provided by these products, there are additional tax strategies used to increase your net return. It’s one thing to earn interest, but it’s another to keep it.
The tax system is a huge factor in retirement planning. For example, if your account is an IRA and you elect to have a guaranteed income rider on the index annuity contract, you and your spouse will have income guaranteed as long as either is alive. At the time both of you have passed, the company would pay any remaining balance to your beneficiaries.
But what if you live a long time taking a guaranteed increased income but the stock market indexes do not go up during that period? The insurance company still has to pay you your increased income even if your account runs out of money. In this example, the year your account runs out of money, you convert the remaining small amount to a Roth IRA. All future income would be considered Roth IRA income with a “zero-tax liability.” You do need to make sure you have a Roth IRA currently in order to do this strategy.
One of the least-known tax strategies is to take regular non-qualified money and purchase a fixed index annuity where the income paid out each month is, depending on your age, approximately 70% tax-free. There is a limit on how much you can put into a Roth IRA to obtain tax-free income, but this strategy has no limit. An example might be that you deposit $1 million into this type of account.
Immediately, if you were drawing $100,000 income each year under this strategy, you would only have to pay taxes on about $30,000 with the remaining $70,000 being tax-free. Who doesn’t like the sound of that?
The final piece of the puzzle is longevity planning. What if you outlive your savings? There is a form of life insurance that will advance the death benefit to pay for home health care, nursing home care, and even offer advanced lump sums of money if you are diagnosed with a critical condition. Also, under current law, the advance is all tax-free.
What about the pensions that go away when the breadwinner dies? What about the potential of decreased Social Security income? The life insurance mentioned above can also provide enough money to replace the lost pension and Social Security dollars providing for your soulmate’s standard of living in the manner in which you want them to have. Your final love letter, so to speak.
People are living longer, which has driven down the cost of this type of insurance, making it possible to provide for you and your spouse. Critical care, chronic care, and loss of your income can all be addressed with one properly structured insurance contract.
Insurance company products can offer stability that most retirees want and need. With proper planning, you can reduce or even eliminate taxes and have retirement income you can enjoy for the rest of your life. You won’t have to worry about running out of income or keeping up with inflation.
So back to the beginning question – do retirees hate annuities and insurance companies? I believe it is safe to say at the rate these products are being purchased by retirees, they actually love insurance companies. How things have changed from the past generations.
This content was brought to you by Impact PartnersVoice. Insurance and annuities offered through Donald W. Owens, OH Insurance License #16525. DT# 1023595-1220.
Since 1980, Don Owens has strived to offer the highest standard of integrity assisting clients in retirement growth and income strategies. His mission is to offer straightforward advice to his clients in and transitioning into retirement to build a financial plan that emphasizes safety and security in the most tax-efficient manner. Don has developed his business by nurturing and maintaining close relationships with each of his clients. He understands how important it is for you to be able to trust your financial professional and is guided by his clients’ objectives and future needs. Don has earned the designations of ChFC, CLU, LUTCF, and FSCP. He is also proud to have received an A rating from the Better Business Bureau. Don and his wife, Kim, have three children, four grandchildren, and two dogs. Family is important in the Owens household, and they enjoy spending time with their large extended family, swimming, barbecuing, and creating memories and a lot of meals together
It’s the biggest shopping day on the planet. Alibaba alone chalked up $38 billion in sales for 2019. No, it’s not a religious, patriotic holiday, or even the one time biggest online shopping day of the year, Black Friday – it’s Singles’ Day in China and much of the world. But what’s good for Alibaba, may not be good for your retirement and many industries.
Started as Bachelors Day by students at China’s Nanjing University in 1993 as a kind of ‘anti-Valentines’ day to celebrate being single, the day evolved into Singles’ Day. November 11 or 11/11 was chosen because it provided the powerful symbolism of four 1’s.
And, while the celebration of being single may have begun in China, the lifestyle and business of ‘singledom’ is spreading fast. Retailers in Southeast Asia, Europe, and North America are all riding the singles wave. According to Forbes writer Sergei Klebnikov, Adobe projects that nearly 25% of retailers plan to offer a Singles Day special. Amazon, Apple, Bed Bath & Beyond, Estee Lauder, Foot Locker, Happy Socks and countless other retailers are all too happy to jump on the singles lifestyle bandwagon.
But, there is more to Singles’ Day then a retail push. Singlehood points to a larger disruptive demographic trend that is shaping lifestyles, your retirement, and the even the markets we invest in today.
According to Pew Research, 61% of young Americans under the age of 35 are without a partner. Up sharply from 33% in 2004. Likewise, the number of people living alone in Canada has doubled over the last three decades. In Europe more than half of the households in Paris, Munich, and Oslo are households of one. Entire nations, such as Sweden and Denmark have more than half of their populations living alone.
So what might this new demographic landscape mean for lifestyles, retirement, and countless industries?
To continue the theme of Singles’ Day on 11/11, here are 11 questions about life tomorrow in a world of one.
1. Who will buy the homes of retirees today that are typically two, three or more bedrooms? Will homes with one bedroom become the new normal and homes with two bedrooms be considered a spatial luxury – and those with three-plus simply a waste? How might real estate developers rethink communities that are predominantly households of one?
2. How many wine glasses will you buy? Watch out household goods industry, rather, than buying a set of eight, or even four glasses, as well as all the other things that stock household cabinets and closets – we may buy only one or two of what we need. For those retirees thinking they are going to downsize by handing off that china set with service for 12 to their kids – good luck. As I observe in a previous article, noone wants your stuff.
3. Who will you buy luxury gifts for? Singles’ Day certainly shows that people are willing to buy things, but will they buy luxury? Will luxury brands begin crafting a new vision of the virtue of treating yourself in contrast to decades of sales based upon treating that special someone as well as marking engagements and anniversaries? Perhaps a whole new socially acceptable celebration of buying your own watch for your retirement will become a new normal.
4. Is a party of one the new normal for leisure? Will restaurants work harder to make a retired single more comfortable and not feel alone? Hotels, cruise ships, and theme parks have traditionally marketed to couples and families. What will leisure look like in a world of one?
5. Will being a pet parent mean more than ever? If a partner is not moving in, will pets become your significant other in youth and later life, thereby getting an even bigger boost of wallet share?
6. How will you share the burden? Managing a household has many moving parts. Typically tasks are split between a couple by conscious decision and often by default. Will retired singles over time learn to do it all, or will there be a growth industry for services once shared with that special someone?
7. Will there be even fewer children? The birthrate continues to tumble. The industrialized world, as well as many industrializing nations, are seeing a record drop in the number of children being born each year. Will the celebration of one, mean none?
8. Does singlehood provide greater career freedom? If there is only one person in a household, does that reduce the fear of losing a job or easily moving from one position that does not quite fit? Employers may find a new mobility in single employees who do not need to worry, nor manage, the financial risks of supporting multi-person household. However, will that newfound freedom in youth, present a longer-term financial risk in retirement for singles?
9. How will you finance retirement alone? Having a partner may increase household consumption and costs – but it may also provide more income and retirement savings. The longevity risk of ones life span outliving ones wealth span may be greater for lifelong singles.
10. Who will care for you? Most of us, at some point, will require care in older age. A partner, or adult child, typically provides family care to an elderly loved one. In a world where neither may exist, does that present a new challenge for individuals planning retirement – and perhaps a new demand for private and public services?
11. Does alone necessarily mean lonely? While it is possible to be alone, but not lonely, will a society with a growing number of households of one portend an even greater rise in the global epidemic of loneliness and social isolation for young and old alike?
I lead the Massachusetts Institute of Technology AgeLab (agelab.mit.edu). Researcher, teacher, speaker and advisor – my work explores how global demographics, technology and changing generational attitudes are transforming business and society. I teach in MIT’s Department of Urban Studies & Planning and the Sloan School’s Advanced Management Program. My new book is The Longevity Economy: Unlocking the World’s Fastest Growing, Most Misunderstood Market (Public Affairs, 2017) . Follow me on Twitter @josephcoughlin.
In today’s world, it’s more important than ever to prepare for your financial future.
And one of the easiest ways to add to your nest-egg is to simply cut your biggest household expenses and save more of your hard earned money.
We often forget some of the golden rules to saving that our parents taught us. Here’s a quick list of things you can do to save on bills in 2019. No matter your circumstance, there’s something here that everyone can use like cutting down your mortgage bill and save on utilities.
1. Take Full Advantage Of These Tax Deductions
Owning a home can be very lucrative. Seriously, owning a home can not only give you a cheaper monthly payment than renting but in many cases, the tax benefits make the decision a no-brainer.
Here are a few of the larger deductions that you need to be sure to take:
Interest you pay on your mortgage: If you own a home and don’t have a mortgage greater than $750,000, you can deduct the interest you pay on the loan. This is one of the biggest benefits to owning a home versus renting–as you could get massive deductions at tax time. The limit used to be $1 million, but the Tax Cuts and Jobs Act of 2017 (TCJA) reduced the limit and made some clarifications on deducting interest from a home equity line of credit.
Property taxes: Another awesome benefit to owning a home is the ability to deduct your property taxes. Before TCJA, the rules were a little more flexible and you were able to deduct the entirety of your property taxes. Now things have a changed a bit. Under the new law, you can deduct up to $10,000. The deduction for state and local income taxes was combined with the deduction for state and local property taxes, too.
Tax incentives for energy-efficient upgrades: While most of the tax incentives for making energy-efficient upgrades to your home have gone away, there are still a couple worth noting. You can still claim tax deductions on solar energy–both for electric and water heating equipment, through 2021. The longer you wait, though, the less money you’ll get back. Here’s the percentage of equipment you can deduct, based on time of installation:
Between January 1, 2017, and December 31, 2019 – 30% of the expenditures are eligible for the credit
Between January 1, 2020, and December 31, 2020 – 26%
Between January 1, 2021, and December 31, 2012 – 22%
2. Use Government Rebates To Get Solar Panels And Slash Your Energy Bills
Warning: Do not pay your next energy bill until you read this…
This is the 1 simple truth your power company doesn’t want you to know. There is a new policy in 2019 that qualifies homeowners who live in specific zip codes to be eligible for $1,000’s of Government funding to install solar panels. Has your power company told you that? Of course not. They hope homeowners don’t learn about this brilliant way to reduce your energy bill tremendously!
When homeowners check whether they qualify many are shocked that subsidies and rebates can cover a lot of the costs associated with installation so it greatly reduces the amount you’ll have to pay. Many may qualify for $0 down! Soon, you could be on your way to significantly reducing your electric bill in a matter of weeks.
Smart homeowners are setting out to do their own research and determine whether this new program lives up to its reputations. Over and over again, many are reporting back on their findings, with the most exciting part being that they are now able to save $1,000s a year on their own energy bill.
New lighting technology has really come a long ways. Now although they do cost more than traditional incandescent bulbs, CFL and LED bulbs can last for years without having to replace them. You don’t even need to replace every bulb in the house at once. Even swapping just your four or five most-used light bulbs can save you $45 or more a year!
CFL vs. LED
CFLs, which use a quarter of the energy of incandescent bulbs and last for years, are the next cheapest option after traditional bulbs. But they also have some drawbacks: They take a while to warm up to full brightness, and they also contain a small amount of mercury.
Meanwhile, LEDs are more expensive. However, they’re getting cheaper all the time, and they are easily the best lighting option available: They light up instantly, are efficient as CFLs, produce a warm glow without getting hot to the touch, and can last for decades.
4. Automate Your Thermostat
One of the easiest things you can do to instantly start saving money on your heating and cooling bills is to get an automated thermostat. These smart thermostats will learn when you are home and make sure the home is at a comfortable setting during those hours.
You may even be able to get a rebate from your utility provider for installing one of these in your home. It’s a win-win!
5. Make A Grocery List
You ever go to the grocery store when you’re hungry and find yourself checking out with way more than you intended? We call this “Hunger Shopping” and it’s quite dangerous to your wallet!
Before going to get groceries, make a list of groceries that you need for the upcoming week. That way, you only buy what you’re intending to use and the amount that will get thrown away from being expired is kept to a minimal.
6. Buy in Bulk
One of the easiest things you can do to instantly start saving money is to buy in bulk! Retailers often give a MUCH better deal on products such as paper towel, toilet paper, detergent, etc if you buy in bulk.
This might seem like an obvious one, but we often forget how much money we waste by not buying in bulk.
7. Want a Patio? Consider Concrete Over Pavers
Building a patio can add great value to your home, as well as creating enjoyable outdoor living space for you and your family. But patios can come at a great cost.
When we decided to add a patio to our home, we looked at the different surface options carefully. Although many landscapers would recommend pavers over concrete because of their durability over time, we decided that the cost savings was more important to us. We personally love the clean look of concrete as well.
Now one thing to remember with concrete is that it WILL crack eventually. But if you have a good concrete crew, it should be prepped right where the cracks are minimal. So we expect to see cracks, but are hopeful that it will be minimal.
8. No Life Insurance? You’ll Want To Use This Brilliant Life Insurance Trick
If you don’t have life insurance, you better read this.
It’s not something any of us like to think about or plan for. But when the worst happens, it’s essential to know your family and loved ones are covered financially. That’s why it’s essential to have a life insurance. A good life insurance policy can help cover the cost of a mortgage, childcare costs and safeguard your family from inheriting any debts you might have.
But the sad truth is, a shocking number of Americans do not have a life insurance policy and their family is at financial risk if the worst should happen.
There is a service that is now allowing users to get free life insurance quotes from some of the top insurance companies out there. People are shocked at how cheap an excellent policy is after requesting their free quotes. But the reality is, life insurance rates are at a 20-year low and thanks to new program policies you could qualify for a great new policy at an extremely affordable price.
To get your free quote today, click below and complete a few questions (about 60 seconds). Once you’re done, you will be presented with choices and rates you never thought possible (no login required). Enjoy your savings!
Just like we need to breathe, your air conditioner needs space where it’s getting air easily. Many AC units are surrounded by shrubs that can restrict the airflow it needs to run efficiently. Take a few minutes this weekend and do the following:
Trim up any bushes that are are touching the unit so there is at least 1 foot of clearance
Clean up the ground for any loose debris or leaves
If the outside of the unit has a lot of debris clogging it up, consider having a professional service and clean it out
10. New Auto Insurance Policy
Here’s what auto insurance companies don’t want you to know…and what thousands of consumers are quickly learning about their current auto insurance plan:
If you’re paying more than $63 per month for auto insurance, this auto insurance comparison tool can help you check to see if you’re overpaying in a few minutes. This is something every driver should be doing every 6 months or so to ensure that they are getting the best deal.
Insurance companies are always competing to win your business, but if you turn a blind eye and keep the same policy in place for a long period of time, your rates might have increased. By checking rates, drivers saved an average of $531 per year with a new policy.
All active military and veterans are entitled to get a 10% discount on all in-store purchases at Lowe’s.
To make it even better, Lowe’s extends this offer to their spouses! Need new tools? How about new appliances? How about a kitchen remodel? Lowe’s carries a variety of things, so take advantage of this incredible discount!
12. Born Before 1985? Get $3,000/year Taken Off Your Mortgage With The Government’s New “Enhanced Relief” Program
Banks Don’t Want Homeowners Knowing This
Still unknown to many is a brilliant Government Program called the Freddie Mac Enhanced Relief Refinance Program (FMERR) that could benefit millions of Americans and reduce their payments by as much as $3,000 per year! You could bet the banks aren’t too thrilled about losing all that profit and might secretly hope homeowners don’t find out before time runs out.
So while the banks happily wait for this program to end, the Government is making a final push and urging homeowners to take advantage. This program is currently active but could be shut down at any given time in 2019. But the good news is that once you’re in, you’re in. If lowering your payments, paying off your mortgage faster, and even taking some cash out would help you, it’s vital you act now and see if you could qualify for FMERR or a better rate in today’s marketplace.
When Lisa first learned about the financial independence, retire early (FIRE) movement she was stunned that so many people, often younger than her, could possibly save enough to retire. Reading the blogs and first-person stories invigorated her. She wanted to follow suit. It changed the way she and her husband spent money. They cut out restaurants, wore old clothes and avoided coffee shops, funneling all the extra cash into paying down debt and building retirement funds.
“It really did motivate us,” Lisa said.
But as someone who has worked in the pharmaceutical industry for a number of years, she never had a huge problem with her job. The more Lisa saved, though, the more she felt annoyed at going to work. The more she saved, the more she wanted to watch HGTV before bed. The more she saved, the more she couldn’t understand why she should walk around in a coat with holes in it simply to prove that she was good with money.
The whole effort “made me unhappy,” said Lisa, who asked to only use her first name since she’s still working full-time. That’s why, four years after starting her FIRE goal of retiring young, Lisa and her husband decided to abandon the ‘retire early’ portion of their savings plan. Instead, she’s decided to focus on financial independence, but also not worry if they want to eat out on a Friday night.
There’s a fine line between frugality and feeling guilty over every dime that you spend in order to save a little bit more. Those that enter FIRE often ignore that line during the accumulation phase, saving as much as possible without regard to how it makes them feel today while sometimes sacrificing their health or well being. But it’s not a feat for everyone. For Lisa, this excessive frugality only became a hindrance to life.
It doesn’t mean she’s giving up saving. Or now, suddenly, going to rack up credit card debt. Instead, Lisa, who blogs about her experience at Mad Money Monster, is reevaluating her life again, figuring out what to keep and what to ignore when it comes to her financial independence (FI) strategy.
Abandoning Her Great Health Care Wasn’t An Option
As they saved, one factor that grew increasingly concerning was the health and welfare of her mom. “My mother depends on us for help for basic living expenses,” Lisa said. She expects to care for her mother as she grows older. While Lisa was making strides paying back debt under the FIRE plan, she had to spend $2,000 on her mother’s dental expenses.
Usually that cost comes out of pocket, and they expect to have to do the same with vision care and some other wellness needs.
This unknown complicated their financial picture. But also Lisa sees her mom’s situation, and then recognizes her luck with her current health care plan, which she describes as “really good.” The idea that she would walk away from that plan, simply so she could retire early – she’s about 60% of the way to her original FIRE mark – she now views as “selfish.” And she’s not comfortable with some of the other options out there for health care coverage, including the public markets or health shares.
“For me to walk away from that [healthcare] would be kind of dumb,” Lisa added.
Keeping A High Savings Rate
Despite rejecting the idea of early retirement at this point in her mid-40s, she’s made great strides in reshaping her financial situation.
When she learned about FIRE, her and her husband had just walked away from buying a large, expensive home that would have put them in a tricky financial predicament. They thought they needed the big house because that’s what people did after getting married. Instead of getting the house, she’s paid off her student loans, two cars and some credit card debt. The family has also invested in two single-family hoes, which they rent out, covering the mortgages.
At the peak of their saving they stashed away about 70% of their income. Now it’s closer to 50%. Still a strong level, but not with early retirement as the goal.
Lisa’s realization that there’s little desire to retire before traditional age has given her the freedom to build wealth for other purposes. She has the financial knowledge now and she’s using it to provide a large inheritance for her daughter one day.
“I want to build legacy wealth for my family,” she said. She has no problem staying at her job to grow that wealth.
But she’s also in a much more secure position, whenever her job does go away.
She’s Not Deprived Of Time
Often when people say they want to retire in their 30s or 40s they have dreams of traveling across the world, seeing new sights and meeting new people. That’s not the case for Lisa. “I’m so content with and entrenched in the adult family life,” she said.
She doesn’t demand much more travel than the summer vacation her family already goes on. Meanwhile, her husband, who works in the film industry, never wants to retire because he’s already found a job he would do even if he didn’t have to work.
“I feel like [we’re] not being deprived of time,” said Lisa.
And now that she has clarified her goals, it makes going into work much easier.
‘Time poor’ is the catch-cry of our era, and yet end-of-life retirement means we have an average of two decades of feeling time rich to look forward to… when we’re old. In this talk, Lacey shares how combining financial independence and mini-retirements is one way to bring that time rich feeling into our youth. Lacey Filipich started her entrepreneurial journey with a hair wrap stall at 10 years old. Today, she is the co-founder and director of two successful businesses; Money School and Maker Kids Club. Between hair wraps and start-ups, Lacey graduated as valedictorian from the The University of Queensland with an Honours degree in Chemical Engineering. She moved to Australia’s ‘wild west’ to begin her career in mining, rising quickly through the ranks. A health scare and her sister’s suicide opened Lacey’s eyes to the world beyond work, leading her to redesign her life and take five mini-retirements in the next five years. This was achievable because of Lacey’s financial position: she started investing at 19 and now earns a passive income. Lacey considers herself time rich: able to choose if, when, where, how, on what and with whom she works. Her story is one of many in the Financially Independent Retiring Early (FIRE) movement supporting the idea that end-of-life retirement is optional. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at https://www.ted.com/tedx
That is the kind of plan in which the employer guarantees the worker a set monthly benefit for life. They are increasingly scarce except for small closely held corporations.
The same rules apply for small closely held businesses as for large corporations.
These plans can be great tools for independent professionals and small business owners. But if you have thousands of employees, DB plans are expensive and risky.
The company is legally obligated to pay the benefits at whatever the cost turns out to be, which is hard to predict.
The advantage is you can use some hopeful accounting to set aside less cash now and deal with the benefit problems later. The problem is “later” comes faster than you would like, and procrastination can be a bitch.
That Brings Us to the Lesson for Today
In October 7, General Electric (GE) announced several changes to its defined benefit pension plans. Among them:
Some 20,000 current employees who still have a legacy-defined benefit plan will see their benefits frozen as of January 2021. After then, they will accrue no further benefits and make no more contributions. The company will instead offer them matching payments in its 401(k) plan.
About 100,000 former GE employees who earned benefits but haven’t yet started receiving them will be offered a one-time, lump sum payment instead. This presents employees with a very interesting proposition. Almost exactly like a Nash equilibrium. More below…
The first part of the announcement is growing standard. But the second part is more interesting, and that’s where I want to focus.
Suppose you are one of the ex-GE workers who earned benefits. As of now, GE has promised to give you some monthly payment when you retire. Say it’s $1,000 a month.
What is the present value of that promised income stream? It depends on your life expectancy, inflation, interest rates and other factors. You can calculate it, though. Say it is $200,000.
Is GE offering to write you a generous check for $200,000? No. We know this because GE’s press release says:
Company funds will not be used to make the lump sum distributions. All distributions will be made from existing pension plan assets in the GE Pension Trust. The company does not expect the plan’s funded status to decrease as a result of this offer. At year-end 2018, the plan’s funded ratio was 80 percent (GAAP).
So GE is not offering to give away its own money, or to take it from other workers. It is simply offering ex-employees their own benefits earlier than planned. But under what assumptions? And how much? The press release didn’t say.
If that’s you, should you take the offer? It’s not an easy call because you are making a bet on the viability of General Electric.
When GE says its plan is 80% funded under GAAP, it necessarily makes an assumption about the plan’s future investment returns.
I dug around their 2018 annual report and found the “expected rate of return” was 8.50% as recently as 2009, when they dropped it to 8.00%, then 7.50% in 2014, to now 6.75%.
So over a decade they went from staggeringly unrealistic down to seriously unrealistic. They still assume that every dollar in their pension fund will grow to almost $4 in 20 years.
That means GE’s offered amounts will probably be too low, because they’ll base their offers on that expected return.
GE hires lots of engineers and other number-oriented people who will see this. Still, I doubt GE will offer more because doing so would compromise their entire corporate viability, as we’ll see in a minute.
GE has $92 billion in pension liabilities offset by roughly $70 billion in assets, plus the roughly $5 billion they’re going to “pre-fund.”
But that is based on 6.75% annual return. Which roughly assumes that in 20 years one dollar will almost quadruple.
What if you assume a 3.5% return? Then you are roughly looking at $2, which would mean the pension plan is underfunded by over $100 billion—and that’s being generous.
GE’s current market cap is less than $75 billion, meaning that technically the pension plan owns General Electric.
This is why GE and other corporations, not to mention state and local pension plans, can’t adopt realistic return assumptions. They would have to start considering bankruptcy.
If GE were to assume 3.5% to 4% future returns, which might still be aggressive in a zero-interest-rate world, they would have to immediately book pension debt that might be larger than their market cap.
GE chair and CEO Larry Culp only took over in October 2018.
We have mutual friends who have nothing but extraordinarily good things to say about him. He is clearly trying to both do the right thing for employees and clean up the balance sheet.
He was dealt a very ugly hand before he even got in the game.
GE needs an additional $5 billion per year minimum just to stave off the pension demon. That won’t make shareholders happy, but Culp is now in the business of survival, not happiness.
That is why GE wants to buy out its defined benefit plan beneficiaries. Right now, the company is on the wrong side of math.
It doesn’t have anything like Hussman’s 31X the benefits it is obligated to pay. Nor do many other plans, both public and private. Nor does Social Security.
To be clear, I think GE will survive. Its businesses generate good revenue and it owns valuable assets. The company can muddle through by gradually bringing down the expected returns and buying out as many DB beneficiaries as possible. But it won’t be fun.
Pension promises are really debt by another name. The numbers are staggering even when you understate them. We never see honest accounting on this because it would make too many heads melt.
If I am a GE employee who is offered a buyout? I might seriously consider taking it because I could then define my own risk and, with my smaller amount, take advantage of investments unavailable to a $75 billion plan.
I predict an unprecedented crisis that will lead to the biggest wipeout of wealth in history. And most investors are completely unaware of the pressure building right now. Learn more here.
I am a financial writer, publisher, and New York Times bestselling-author. Each week, nearly a million readers around the world receive my Thoughts From the Frontline free investment newsletter. My most recent book is Code Red: How to Protect Your Savings from the Coming Crisis. I appear regularly on CNBC and Bloomberg TV. I’m also Chairman of Mauldin Economics, a research group that provides monthly analysis and recommendations to thousands of readers around the world. I was previously CEO of the American Bureau of Economic Research. Today I am President of the investment advisory firm Millennium Wave Advisors, LLC. I am also president and registered principal of Millennium Wave Securities, LLC a FINRA and SIPC registered broker dealer. When I’m not traveling to speak at conferences and events, I live in Dallas, TX. I’m also the proud father of seven children.
FREE Help for Seniors! Miriam Dix is an independent Medicare Insurance Agent and helps seniors do more with less by helping them stretch their healthcare dollars and determine the best value for their specific situation. Miriam does not work for any one insurance company and, instead she offers the best value plans available. Miriam can be reached at 1-904-513-0535 and via email at firstname.lastname@example.org. Send me your questions! I’ll help ya! 🙂 News clip available at: http://www.wdrb.com/story/29661213/ge…
If you are trying to figure out how much money you need to save for retirement, there’s an easy rule of thumb that you can use: simply multiply your expected annual expenses in retirement by twenty-five.
For example, if you expect to spend $100,000 annually once you’re retired, you’ll want to have a $2.5 million portfolio saved up. If you’d like to play around with the numbers to estimate your own retirement needs, you can use this simple retirement calculator.
This retirement savings rule of thumb is based on the 1998 landmark study conducted by Carl Hubbard, Philip Cooley and Daniel Walz, in their seminal study known as the Trinity Study. They built on the 1994 work of William Bengen, who originally coined the ‘4% Rule’.
The Trinity Study evaluated safe retirement withdrawal rates, and found that 4% was sufficient for the majority of retirees. A safe withdrawal rate simply refers to the amount of money that can be taken out of an account and allow you to reasonably expect the portfolio to not fail, or run out of money. In this case, the 4% withdrawal rate refers to the amount of money that will be withdrawn from the balance of the retirement portfolio in the first year of retirement. In subsequent years, the balance withdrawn will simply be an inflation adjusted number based on the total dollar amount withdrawn the year prior.
The Trinity Study has become so well-known, that it has been adopted by hopeful retirees from all walks of life, including those hoping to retire early. The FIRE movement (Financial Independence, Retire Early) is a lifestyle movement with the goal of allowing individuals to retire as early and quickly as possible.
However, one detail that the movement is getting wrong and completely missing, is the fact that the Trinity Study’s 4% rule of thumb was based on a 30 year retirement period. This time horizon was determined to be on the conservative end of retirements by the authors of the study. If you work until you’re 65, having a 30 year retirement seems pretty reasonable. I don’t think many would argue that living until the age of 95 is a short life by any means.
The problem arises due to the FIRE movement seeking a much longer retirement period. If you retire at 45 years old, you may need a portfolio that will survive another 45 to 50 years in order to avoid running out of money. In this case, making a judgement error could end up meaning re-entering the workforce at an advanced age. For this reason, relying on a 4% withdrawal rate is an extremely risky decision if you plan to retire early.
This begs the question of what a more appropriate withdrawal rate is if you plan to retire early. The answer is that it depends. In general, the study found that as the balance between stocks and bonds shifts towards equities, a portfolio is more likely to withstand the test of time. So inherently, your risk tolerance will need to be factored into the equation. If you are comfortable with 75%+ of your portfolio being in stocks (and stomaching the increased risk), you might be safe with a 3% withdrawal rate. If you prefer less volatile investments, a lower rate is more conservative.
This is bad news for a lot of you hoping to retire early.
For one, it would mean having to save an additional $833,000 if you hope to spend $100,000 annually like in the example above. Unless you are an exceptionally high earner, it’ll likely mean having to work for several additional years or having to continue to earn additional income even after retirement.
With the buzz surrounding the gig economy and the seemingly endless ‘side-hustle’ opportunities available, this seems like a surmountable hurdle. The deficit in retirement savings required also highlights the impact of having to save for retirement as efficiently as possible.
Just as important, you’ll also want to avoid making costly investment mistakes. One that comes to mind is erroneously viewing your vehicle as a sound investment. Another pitfall is picking individual stocks in lieu of index funds or ETFs. To set yourself up for success, minimizing fees and diversifying your investments is the name of the game.
Does all of this mean that the 4% rule is futile and should be completely ignored? Absolutely not. The authors of the Trinity Study ran simulations to find what the safe withdrawal rate would be for varying time horizons. But at the end of the day, they were just that: simulations. Even if you only had an expected 15 year retirement and used a conservative withdrawal rate, there is always the chance that your portfolio could fail. The same is true in the opposite direction: there’s always the chance that a 4% withdrawal could be sufficient for a 50 year retirement.
The question you have to answer is whether you are comfortable taking that risk. I know I’m not.
There are many financial gurus out there that tell you how much to save for retirement, but how did they come up with that number? Honestly they are all just using each others guesses, but as financial advisors we need to do better. While others guess that you should save 10, 12,15% for retirement we can actually figure out how much you should save…to the penny! The first thing we want to know is how much income are you looking for in retirement? Typically we say that you should aim to have 75% of your current income replaced for retirement. The reason is that social security and other savings may make up the difference. Today we will calculate how much a 30 year old couple should save for retirement given that they each have income of $50,ooo per year. We will adjust this to account for inflation and make some assumptions about their retirement age and life expectancy. After calculating this along with expected returns we can see that they need to save 11.9% of their income yearly to have 75% of their income in retirement. We love doing this for our clients and if you are considering a place for your retirement investments then we hope you will consider jazzWealth.com We’re an investing service that also helps you keep your dough straight. We’ll manage your retirement investments and, using NestEgg we can help you with every penny! —Ready to subscribe— https://www.youtube.com/jazzwealth?su… For more information visit: www.JazzWealth.com — Instagram @jazzWealth — Facebook https://www.facebook.com/JazzWealth/ — Twitter @jazzWealth Investment related questions 📧 Dustin@JazzWealth.com Business Affairs 📧Carolyn@JazzWealth.com
Sources differ, but the story remains the same. According to a 2018 study by Northwestern Mutual, 21% of Americans have no retirement savings and an additional 10% have less than $5,000 in savings. A third of Baby Boomers currently in, or approaching, retirement age have between nothing and $25,000 set aside.
The Economic Policy Institute (EPI) paints an even bleaker picture. Their data from 2013 reports that “nearly half of families have no retirement account savings at all.” For most age groups, the group found, “median account balances in 2013 were less than half their pre-recession peak and lower than at the start of the new millennium.”
The EPI further found these numbers even worse for millennials. Nearly six in 10 have no retirement savings whatsoever.
But financial experts advise that the average 65 year old have between $1 million and $1.5 million set aside for retirement.
What Is the Average Retirement Account?
For workers who have some savings, the amounts differ (appropriately) by generation. The older you are, the more you will have set aside. However there are two ways to present this data, and we’ll use both.
Workers With Savings
Following are the mean and median retirement accounts for people who have one. That is to say, this data only shows what a representative account looks like without factoring in figures for accounts that don’t exist. This data comes per the Federal Reserve’s Survey of Consumer Finances. (Numbers rounded to the nearest hundred.)
• Under age 35:
Average retirement account: $32,500
Median retirement account: $12,300
• Age 35 – 44:
Average retirement account: $100,000
Median retirement account: $37,000
• Age 45 – 55:
Average retirement account: $215,800
Median retirement account: $82,600
• Age 55 – 64:
Average retirement account: $374,000
Median retirement account: $120,000
• Age 65 – 74:
Average retirement account: $358,000
Median retirement account: $126,000
For households older than 65 years, retirement accounts begin to decline as these individuals leave the workforce and begin spending their savings.
Including Workers Without Savings
When accounting for people who have no retirement savings the picture looks considerably worse. Following are the median retirement accounts when including the figures for people with no retirement savings. The following do not include mean retirement accounts, as this would be statistically less informative than median data.
• Age 32 – 37: $480
• Age 38 – 43: $4,200
• Age 44 – 49: $6,200
• Age 50 – 55: $8,000
• Age 56 – 61: $17,000
How Much Should You Have Saved For Retirement?
So that’s how much people have saved for retirement, or more often don’t. Now for the more useful question: How much should you have saved for retirement?
The truth is that there’s no hard and fast rule. It varies widely by your age, standard of living and (perhaps most importantly) location. Someone who rents an apartment in San Francisco needs a whole heck of a lot more set aside than a homeowner in the Upper Peninsula of Michigan.
The rule of thumb is to estimate by income. Decide the income you want to live on once you retire, then picture your life as a series of benchmarks set by age. At each age you want a multiple of this retirement income saved up. Your goal is to have 10 to 11 times your desired income in savings by retirement.
• By age 30: between half and the desired income in savings
• By age 35: between the desired amount and double the desired income in savings
• By age 40: between double and triple the desired income in savings
• By age 45: between triple and quadruple the desired income in savings
• By age 50: between five times and six times desired income in savings
• By age 55: between six times and seven times desired income in savings
• By age 60: between seven times and nine times desired income in savings
• By age 65: between eight times and 11 times desired income in savings
So, if you earn $50,000 per year, by age 40 you will want to have between $100,000 and $150,000 in retirement savings set aside. The formula grows later in life for two reasons. First, as your savings accumulate they will grow faster. Second, as you approach retirement it is often wise to accelerate your savings plan.
What You Should Do Next for Your Retirement Savings
Retirement is approaching a crisis. In the coming decades millions of Americans will get too old to continue working without the means to stop. Millennials, crippled by debt from graduation, will turn this crisis into a catastrophe in about 40 years. And Social Security, designed to prevent exactly this problem, covers less than half of an average retiree’s costs of living.
It’s beyond the scope of this article to discuss exactly how this happened, but if you’re one of the many people who have fallen behind on retirement savings, don’t panic. There’s plenty you can do. But… it might not necessarily be easy.
The key is to think about retirement savings like a debt. This is money you owe to yourself and it charges reverse interest. Every day you go without adding money to your retirement account is a day you lose investment income. That’s money that you’ll need someday and won’t have.
Next, take stock of where you are. How much will you want to live on in retirement and how much do you have saved today? Use our chart above. That will tell you how far behind you are compared to where you need to be. Are you a 40 year old with $25,000 in savings who will want to live on $50,000 per year in retirement? Then you’ve got $75,000 you need to make up for.
Now, begin catching up. Chip away at that debt every week and every month. Pay into your 401k and IRA the same way you would whittle down a credit card. By thinking about it this way, as a specific goal, you can take away some of the fear of saving for retirement and turn it into an achievable (if large) amount. It’s not just some big, black hole you can never fill. It’s a number, and numbers can go down.
It won’t necessarily be fun. You might have to cut back on luxuries or take on some extra work, but even if you start late in life you can catch up on your retirement.
Want to be happy in retirement? Then cultivate relationships and spend more money on leisure activities—at least that’s what new academic research (as well as common sense) suggests.
To help you with the leisure part, Forbes presents its 2019 list of 25 great places to pursue seven retirement passions: arts, fine dining, lifelong learning, volunteering, outdoor activities on water, outdoor activities on land and (in its own category) golf.
Most are recommended for multiple passions and two—Seattle and Austin, Texas—excel in all seven categories. Our picks are spread across 21 states in all four continental time zones.
While our flagship Best Places To Retire list highlights locations that offer the best retirement value for the buck, our passions list doesn’t disqualify places simply because they’ve got high costs or taxes. Athens, Georgia, our most affordable passions pick, has a median home price of just $178,000, while San Francisco, our most expensive, has a median home price of $1.36 million. Although high costs (or high taxes) won’t keep a city from making this new list, we do take into account such practical quality of life factors as air quality, crime, doctor availability and how walkable and bikeable a city is. You can read more about our selection method here.
Fine dining 🍴
Lifelong learning 🎓
Outdoor activities on water ⛵
Outdoor activities on land 🍁
PASSIONS: ❤️ ⛵
Great for volunteering and outdoor water activities
MEDIAN HOME PRICE: $428,000
Water on three sides, good air quality and a moderate climate make this charming historic Chesapeake Bay city an ideal spot for those who love boating, fishing or a waterfront view. For the newbie, the city offers lots of recreational boating schools and chartering opportunities. There’s a high rate of local volunteerism and the downtown area, which doubles as Maryland’s state capital (and was the U.S. capital for a year starting in 1783) is very walkable. Doctors per capita are at the national average. Elevation is 40 feet. On the downside, cost of living is 41% above the national average and the crime rate is above the national average. Taxes are on the high side, too; while Social Security benefits are exempt from tax, the top state/local income tax rate is 8.31% and the state has both an estate and inheritance tax.
PASSIONS: 🎨 🎓 🍁
Great for arts, lifelong learning and outdoor land activities
MEDIAN HOME PRICE: $462,000
Located 285 miles south of Portland, this cultural outpost offers art galleries and the nine-month a year Oregon Shakespeare Festival, all set amid scenic mountains and forests. Southern Oregon University hosts an Osher Lifelong Learning Institute and allows free auditing of regular college classes. The highly walkable downtown (elevation: 1,950 feet) is set in a moderate climate with little snow, good air quality, a low serious crime rate and a high number of doctors per capita. Nature trails are just outside town. But the cost of living is 40% above the national average and Oregon makes up for its lack of a sales tax with an income tax rate that hits 9% at just $50,000 of income (with Social Security excluded). There is also a state estate tax.
PASSIONS: 🎨 🎓 🍁
Great for arts, lifelong learning and outdoor land activities
MEDIAN HOME PRICE: $178,000
This affordable college town, just 70 miles east of Atlanta, has a vibrant arts scene. The University of Georgia hosts an Osher Lifelong Learning Institute, plus offers seniors free admission to regular classes. Mild terrain and climate (the nation’s first garden club was founded here in 1891) and good air quality are all conducive to warm-weather outdoor activities at an elevation of 600 feet. The ratio of doctors per capita is sufficient. Cost of living is 7% below the national average and the serious crime rate is low. Georgia doesn’t tax estates or Social Security benefits and offers a generous additional break for other retirement income. Top state income rate is 5.75%. One notable downside: Not very walkable.
Passions: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳
Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf
MEDIAN HOME PRICE: $369,000
Sunny capital of Texas offers scores of dining and entertainment venues (including the annual SXSW festival), plus learning opportunities at the University of Texas, all surrounded by dozens of golf courses. The city boasts a high number of physicians per capita, good air quality, a good economy and a high rate of volunteering. The impressive state capitol building is higher than the one in Washington, D.C. At an elevation of 300 feet, the city is very bikeable and somewhat walkable. While there is no state income or estate/inheritance taxe, the cost of living is 30% above the national average and the serious crime rate is slightly above the national average.
PASSIONS: ⛵ 🍁
Great for outdoor water and land activities
MEDIAN HOME PRICE: $440,000
Lots of snow guarantees vibrant downhill and cross-country skiing in this scenic “Outdoor Playground of the West” 160 miles southeast of Portland. Other outdoor pursuits at an elevation of 3,600 feet around the north-flowing Deschutes River include fishing, tubing, hiking, rock climbing, bicycling and paragliding. Besides good air quality, a low serious crime rate and a high number of doctors per capita, the area boasts a strong economy. But Oregon makes up for its lack of a sales tax with an income tax rate that reaches 9% on just $50,000 of taxable income (which excludes Social Security). There’s also a state estate tax. The town itself is not very walkable. Cost of living is 34% above the national average.
PASSIONS: 🎓 ❤️ 🍁
Great for lifelong learning, outdoor land activities and volunteering
MEDIAN HOME PRICE: $299,000
The surprisingly mild climate in Idaho’s capital city, nicknamed “City of Trees,” is conducive to outdoor land activities, while Boise State University hosts an Osher Lifelong Learning Institute and offers free auditing of regular classes for seniors. Other pluses include a high level of volunteerism, a high number of physicians per capita, a low serious crime rate, good air quality and a good economy. With an elevation of 2,700 feet, the city is very bikeable, though not as walkable. Cost of living is only 7% above the national average. There is no state income tax on Social Security earnings, nor a state estate/inheritance tax. Idaho’s income tax rate for married couples is 6.925% on taxable income above $23,000.
PASSIONS:🎨 🍴 🎓 ❤️ ⛵ 🍁
Great for arts, fine dining, lifelong learning, volunteering and outdoor water and land activities
MEDIAN HOME PRICE: $604,000
This buzzy historic coastal state capital city of 685,000 offers a wealth of cultural. and educational activities. Not too surprising, considering there are more than 50 area colleges. Boston has good air quality, abundant doctors per capita, and a good economy. At an elevation of 140 feet, the city, named for an English town, is both highly walkable and bikeable. The top state income tax rate is only 5% and there’s no state income tax on Social Security earnings. On the negative side, there’s a state estate tax and a higher than average serious crime rate. But the big downside is the cost of living: 82% above the national average.
PASSIONS: 🎨 🎓 ❤️ 🍁
Great for arts, lifelong learning, volunteering and outdoor land activities
MEDIAN HOME PRICE: $742,000
This city, 30 miles northwest of Denver, is at the center of a huge recreational open space abutting the Rockies at 5,400 feet of elevation, which can be enjoyed in 10 months of annual sunshine. It’s also the home the University of Colorado, which allows seniors to audit courses for free. Boulder is a walkable and bikeable city with a low serious crime rate, good air quality, abundant doctors and a strong economy. Volunteering is a way of life here. While there is no state estate/inheritance tax, the state income tax (a flat 4.63%) does hit Social Security benefits. One big downside is the cost of living: 87% above the national average.
Passions: ❤️🍁 ⛳
Great for volunteering, outdoor land activities and golf
MEDIAN HOME PRICE: $317,000
This Phoenix suburb, named for Arizona’s first veterinary surgeon, offers myriad outdoor activities, including 185 golf courses in the region. There’s a low serious crime rate, a good economy and a high rate of volunteering. With an elevation of 1,200 feet, the city is very bikeable, although not all that walkable. There is no state income tax on Social Security earnings and no state estate/inheritance. The sate income tax rate tops out at just 4.54% on a married couple’s taxable income above $317,900. On the downside, the number of doctors per capita is below the national average and the air quality is poor. Cost of living is 23% above the national average.
Chapel Hill, North Carolina
PASSIONS: 🎨 🍴 🎓 🍁
Great for arts, fine dining, lifelong learning and outdoor land activities
MEDIAN HOME PRICE: $376,000
The home of the University of North Carolina, which offers free auditing of classes for senior citizens, this college town has been called America’s “foodiest small town” for its range of culinary options. It also has a high number of physicians per capita, good air quality, a low serious crime rate, a strong economy—and quirky blue fire trucks. There’s no North Carolina income tax on Social Security benefits and no state estate/inheritance tax. The state income tax rate is a flat 5.499%. At an elevation of 500 feet, the city is somewhat bikeable, but not very walkable. Cost of living is 30% above national average.
Charleston, South Carolina
PASSIONS: 🎨 🍴 ⛵ ⛳
Great for arts, fine dining, outdoor water activities and golf
MEDIAN HOME PRICE: $322,000
This historic coastal city brims with activities, both indoors and out. (The first game of golf in the U.S. took place here.) Pluses include a high number of doctors per capita, good air quality and a good economy. There’s no state estate/inheritance tax, no state income tax on Social Security benefits and there are additional tax breaks on pension income. But the state income tax rate tops out at an above average 7% on taxable income of just $14,860. At an elevation of 20 feet, the city is somewhat bikeable, but not very walkable. Cost of living is 22% above national average.
PASSIONS: 🍴 ❤️ ⛳
Great for fine dining, volunteering and golf
POPULATION: 1.34 million
MEDIAN HOME PRICE: $217,000
Scores of public golf courses plus fine dining (far beyond the nation’s first drive-in restaurant, which opened here in 1921) and what is said to be the nation’s largest arts district distinguish the Big D. At an elevation of 430 feet, the city is somewhat walkable and bikeable and has an adequate number of physicians per capita and support for volunteering. Atop of a strong economy, there is no state taxation of income, estates or inheritances. Cost of living is only 8% higher than the national average. On the downside, the serious crime rate is above the national average and the air quality is poor.
Great for lifelong learning
MEDIAN HOME PRICE: $219,000
The University of Arkansas offers free tuition to senior citizens at its flagship campus in this Ozarks city 200 miles northwest of Little Rock. Besides a cost of living 1% below the national average, other pluses include good air quality, adequate number of physicians per capita and a good economy. At an elevation of 1,400 feet, the city (originally named Washington) is somewhat bikeable, although not that walkable. There is no state estate/inheritance tax and there’s no state income tax on Social Security benefits, plus there’s a small additional break for pension income. But the state income tax reaches 6.9% on a married-couple’s income above $35,099. The serious crime rate is above national average.
Las Vegas, Nevada
PASSIONS: 🎨 🍴 ⛵ 🍁 ⛳
Great for arts, fine dining, outdoor water and land activities and golf
POPULATION: 2 million (Las Vegas Valley)
MEDIAN HOME PRICE: $277,000
World-class entertainment centered around the hotels and casinos, famous chefs, and nearby water and land activities, including golf, grace this exploding desert valley. (In 1900, the population was just 18.) While summers are hot and dry, the other nine months are quite pleasant, and sun is year-round. At an elevation of 2,000 feet, the area is somewhat walkable and bikeable. A good economy is bolstered by no state income or estate/inheritance tax. Downsides include poor air quality, low ratio of physicians per capita and a high serious crime rate. Cost of living is 18% above the national average.
Los Angeles, California
PASSIONS: 🎨 🍴 🎓 ⛵ 🍁 ⛳
Great for arts, fine dining, lifelong learning, outdoor water and land activities and golf
POPULATION: 4 million
MEDIAN HOME PRICE: $686,000
The City of Angels has multiple colleges and universities offering reduced-price programs for senior citizens, world-class restaurants, numerous performance venues, a wide range of outdoor activities and many golf courses. Pluses include 28 days a year of sun, sufficient physicians per capita and a strong economy. Despites its reputation as car dependent and congested, the city, with an elevation of 300 feet, is both very walkable and bikeable (despites safety concerns for bikers). There is no state tax on Social Security benefits, estates or inheritances. But the state income tax hits a hefty 9.3% on taxable income above $150,000 per couple and goes up to 12.3% for the very wealthy. Among the drawbacks: poor air quality (although better than it used to be) and a serious crime rate above national average. Cost of living is 95% above national average.
New York, New York
PASSIONS: 🎨 🍴 🎓 ⛵ ⛳
Great for arts, fine dining, lifelong learning, outdoor water activities and golf
POPULATION: 8.6 million
MEDIAN HOME PRICE: $682,000
Dozens of colleges, fabulous arts and dining, and even golf courses accessible via subway can be found in the country’s largest city. Pluses include a high number of physicians per capita, good air quality and a strong economy. With an elevation of 30 feet, the Big Apple is very walkable and bikeable, despite concerns about bicyclist safety. There is no state income tax on Social Security benefits, plus there are additional state tax breaks on pension income. But there is a state estate tax, the combined state and city income tax rate can reach a whopping 12.696% and the cost of living is 109% above national average.
Pinehurst, North Carolina
Great for golf
MEDIAN HOME PRICE: $281,000
Some 40 golf courses, led by famous century-old Pinehurst Resort, plus golf schools surround this scenic village 90 miles east of Charlotte. Pluses include an extremely low serious crime rate, above-average rate of doctors per capita and good air quality. At an elevation of 600 feet, the town, originally named Tuftstown, is somewhat walkable and bikeable. There are no state taxes on Social Security earnings, estates or inheritances. The state income tax rate is a flat 5.499% and the cost of living is 11% above the national average.
PASSIONS: 🍴 ⛵ 🍁
Great for fine dining and outdoor water and land activities
MEDIAN HOME PRICE: $314,000
This coastal city offers a wide variety of water and land recreation, including boating, kayaking, rafting, cross-country skiing, hiking and bicycling. There’s a good restaurant scene, a low serious crime rate, a high ratio of doctors per capita and good air quality. The city—named after an island in the English Channel—has an elevation of 60 feet and is very walkable and bikeable. There is no state income tax on Social Security earnings, but there is a state estate tax. The state income tax rate reaches 7.15% at taxable income above $103,400 for a couple. The
PASSIONS: 🎨 🍴 🎓 ❤️ 🍁 ⛳
Great for arts, fine dining, lifelong learning, volunteering, outdoor land activities and golf
MEDIAN HOME PRICE: $426,000
City affords wide range of pursuits, including free senior citizen auditing of classes at Portland State University. Pluses include a high ratio of physicians per capita, good air quality, a high rate of volunteering and a good economy. At an elevation of 50 feet the city—named after Portland, Maine—is highly walkable and bikeable. The state makes up for its lack of a sales tax with an income tax rate that hits 9% on just $50,000 of income (with Social Security excluded). There is also a state estate tax. Cost of living is 48% above the national average.
Salt Lake City, Utah
PASSIONS: 🎓 ❤️ ⛵ 🍁
Great for lifelong learning, volunteering and outdoor water and land activities
MEDIAN HOME PRICE: $402,000
Mountains, lakes and rivers create a choice of outdoor activities, including skiing, bird watching and fishing around this state capital city. Indoors, the University of Utah offers courses a wide range of courses for seniors in concert with the Osher Lifelong Learning Institute. The city has a high rate of volunteering, a high rank on the Milken Institute list of best cities for successful aging and a strong economy. At an elevation of 4,300 feet, it is very walkable and bikeable. There is no state estate tax, but the state income, levied at a flat 4.95% rate, hits Social Security benefits. The cost of living is 27% above the national average.
San Francisco, California
PASSIONS: 🎨 🍴 🎓 ⛵
Great for arts, fine dining, lifelong learning and outdoor water activities
MEDIAN HOME PRICE: $1.36 million
Surrounded by water, this scenic city is a mecca of culture and food, with 57 Michelin starred restaurants (compared to 76 in 10 times more populous New York). Opportunities for senior learning are offered at an Osher Lifelong Learning Institute at San Francisco State and at other venues. There’s a high ratio of doctors per capita, good air quality and a strong economy. Despite the famed hills, the city, with an elevation of 50 feet, is very walkable and bikeable, with both trails and protected bike lanes. There is no state estate/inheritance tax and no income tax on Social Security benefits, but the state income tax rate is a hefty 9.3% on income above $150,000 per couple and goes up to 12.3% for the very wealthy. The serious crime rate is above the national average, but the biggest downside is the cost of living: a stunning 205% above the national average.
Santa Fe, New Mexico
PASSIONS: 🎨 🍴 🍁
Great for arts, fine dining and outdoor land activities
MEDIAN HOME PRICE: $397,000
Scores of art galleries, fine restaurants and museums, plus world-class skiing, distinguish this scenic state capital mountain town (elevation 7,200 feet), 60 miles north of Albuquerque. Somewhat walkable and bikeable, the city has a high number of doctors per capita, good air quality and a low serious crime rate. There is no state estate tax, but the state income tax does hit Social Security benefits. The state income tax rate is 4.9% on taxable income of married couples above $24,000. The cost of living is 21% above national average.
PASSIONS: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳
Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf
MEDIAN HOME PRICE: $261,000
Nearby beaches, fishing, boating, a big arts/cultural scene and 30 golf courses dominate this Gulf Coast city 60 miles south of Tampa. With an elevation of 16 feet, the area is very walkable and bikeable, with good air quality, a strong economy and an adequate number of physicians per capita. The cost of living is only 9% above national average. There is no state income or estate tax. One downside: a serious crime rate above the national average.
PASSIONS: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳
Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf
MEDIAN HOME PRICE: $730,000
Still-booming Puget Sound city offers all the passions, including an Osher Lifelong Learning Institute at the University of Washington. At an elevation up to 500 feet, the city is extremely walkable, bikeable and even boatable, with good mass transit. Other pluses include good air quality, a high ratio of doctors per capita, a very strong economy, and a good volunteering culture. There is no state income, estate or inheritance tax. But the cost of living is a whopping 104% above the national average and the serious crime rate is also higher than average.
Traverse City, Michigan
PASSIONS: 🎨 🍴 ⛵ ⛳
Great for arts, fine dining, outdoor water activities and golf.
MEDIAN HOME PRICE: $255,000
Frontage on Lake Michigan, the famed Interlochen Center for the Arts, 50 area golf courses and a reputation as a top foodie town all make his city, 250 miles northwest of Detroit, a top passions choice. There’s good air quality, above-average doctors per capita and a decent economy. At an elevation of 600 feet the city—center of the nation’s largest area for growing tart cherries—is very walkable and bikeable. Cost of living is only 2% above national average. There’s no state estate or inheritance tax and no tax on Social Security benefits, plus additional breaks for pension income. The state income tax rate is a flat 4.25%. One downside: The serious crime rate is above the national average.
A journalist for nearly five decades, I’ve written for Forbes since 1987. I’ve covered personal finance, taxes, retirement, nonprofits, scandals and other topics that interest me. I also am the author of a novel, OFFSIDE: A Mystery. Email me at: email@example.com .
The World’s Retirement Havens – Top 10 Best Places To Retire In The World For 2018. ============= ► Subscribe for latest video ! ► https://goo.gl/lOasu9 ► Follow me on Twitter: https://goo.gl/srKHao ► Facebook: https://goo.gl/yB9XvG ============= Today, retiring abroad is about launching a new life in a new country, starting over someplace sunny and exotic with white-sand beaches or Old World culture. But there is no one way to determine the best place to retire for every person. And with a seemingly endless amount of choices, how will you ever find the right one for you. International Living’s most recent Annual Global Retirement Index 2018 compares 24 countries that give you the maximum return for your money and promise to deliver a better quality of life. Overall, the Index is based on ratings in 12 categories: buying and investing, renting, benefits and discounts, visas and residence, cost of living, fitting in, entertainment and amenities, healthcare, healthy lifestyle, development, climate, and governance. Here are the 10 retirement destinations in the world for 2018: 1. Costa Rica – The World’s Best Retirement Haven 2. Mexico – Convenient, Exotic, First-World Living 3. Panama – Friendly, Welcoming, and Great Benefits 4. Ecuador – Diverse, Unhurried, and Metropolitan 5. Malaysia – Easy, English-Speaking, and First World. 6. Colombia – Sophisticated and Affordable 7. Portugal – Europe’s Best Retirement Haven 8. Nicaragua – Best Bang-for-Your Buck in Latin America 9. Spain – Romance, History, and Charming Villages 10. Peru – Low Cost Living, Vibrant, and Diverse. Thanks for watching this video. I hope it’s useful for you. (This article is an opinion based on facts and is meant as infotainment) ============= If you have any issue with the content used in my channel or you find something that belongs to you, please contact: ►Business email: firstname.lastname@example.org Music by: Nicolai Heidlas (https://soundcloud.com/nicolai-heidlas) Title: 50 New Cities
Here is what matters if you’ve made it and want to keep it.Do the financial markets have your attention? I assume so. After all, Wednesday’s 800-point drop in the Dow was the worst day in the U.S. stock market this year. And while many investors missed it, the December 2018 plunge in stock prices capped off a 20% decline which started in October. That could have put a big divot in the plans of folks recently retired or in the late stages of their careers.
Stumbling at the finish line?
Demographics tell us that there is massive group of people who are between 55 and 70 years old. They are the majority of the “Baby Boomer” generation. Many of them have built very nice nest eggs, thanks to a robust U.S. economy over the last 40 years. That period of technological innovation and globalization of the economy also produced four decades of generally falling interest rates. That’s provided a historic opportunity to build wealth, if you saved well and invested patiently.
But now here we are, with a stock market near all-time highs and interest rates crashing toward zero. The tailwind that lifted Baby Boomers in their “accumulation” years may flip to a headwind, just in time for them to start using the money.
Focus on what matters
At this stage of their investment life, Baby Boomers are tempted from all directions. They are told to bank on index funds, 60/40 portfolios, structured products and private partnerships. And, while there are merits to each, I am telling you what I see as someone who has been hanging around investment markets since this Baby Boomer was a Wall Street rookie in the beloved World Trade Center in NYC: much of it is bunk. It’s a distraction. It’s a sales pitch.
Take these over-hyped attempts by wealth management firms to boost their bottom line and scale their businesses, and bring your attention to your own priorities. Today, as much as any time in the past 10 years, your focus should be on true risk-management.
That does not necessarily mean running to cash. That is an outright timing move, and it borders on speculation. But it does mean that the intended use of your accumulated assets (when you need it, how much you need, and how you will navigate the markets of the future) should be
inward-looking. It should not be based on trying to guess what the stock market is going to do.
The big news on Wednesday was the “inversion” of a closely-watched part of the U.S. Treasury yield curve. Translated to English, that means for the first time since 2007, U.S. Bonds maturing in 10 years yielded less than those due in 2 years. This is far from the first inversion we have seen between different areas of the Treasury market. However, it is the one that is most widely-followed as a recession warning signal.
The chart above shows 3 things that were essentially in sync around the time the last 2 stock bear markets began. The 10-2 spread inverted, but then quickly reverted to normal. The Fed cut interest rates for the first time in a while. And, the S&P 500 peaked in value, and fell over 40% from that peak.
Let that sink in, given what we have witnessed in just the past 2 weeks. Then, fast-forward to today, where we find ourselves in a very similar situation regarding inversion and the Fed. See this chart below:
What stands out the most to me in that chart is how the spread between the 10-year and 2-year yields is almost perfectly opposite that of the S&P 500’s price movement. That is, when the 10-2 spread is dropping, the S&P 500 is usually moving higher. But when that spread starts to rise, at it is likely to soon, the S&P 500 falls…hard. As a career chartist, I just can’t ignore that.
I have been writing about the threat of an eventual “10-2 inversion” in Forbes.com since April, 2017. It finally happened this week, 19 months into what increasingly looks like a period of muted returns for investors. That is, if they follow rules identical to those they followed for the past 10 years.
Recessions are bad, but this is worse
We saw on display this week what I have been talking about since early last year: that it will not take the declaration of a recession to tip the global stock market into a panic-driven selloff that rips through retirement efforts. All that is needed is for stock prices to follow through to the downside is to actually see the market react to the preponderance of evidence that has been building for a while now.
In other words, it is the market’s fear of the future (recession) and not the actual event that is most important. By the time a recession is officially declared, you won’t need to react. The damage will already be done.
Specifically, a slowing global economy, excessive “easy money” policies by the Fed and its global counterparts, and a frenzied U.S. political environment. This has shaken investor confidence, and now the only thing that ultimately matters in your retirement portfolio: the prices/values of the securities you own, is under pressure.
What to do about it
First, don’t fall prey to the hoards of market commentators whose livelihood depends on progressively higher stock prices. Corrections are not always healthy, diversification is often a ruse, and long-term investing is for 25 year-olds!
For those who have “fought the good fight” to get to the precipice of a retirement they have darn well earned, the last thing they want is to have this inanimate object (the financial markets) knock them back toward a more compromised retirement plan.
The best news about today’s investment climate is that the tools we have to navigate through them are as plentiful as ever. Even in a period of discouragingly low interest rates for folks who figured on 4-6% CDs paying their bills in retirement, bear markets in stocks and bonds can be dealt with, and even exploited for your benefit.
Bull or bear? You should not care!
Maybe this is not “the big one” that bearish pundit have been warning about. Perhaps it is just another bump in the road of a historically long bull market for both stocks and bonds. But again, market timing and headline events like 10-2 spreads, recessions and the like are not your priority.
What your priority is, if you want to improve your chances of success toward and through retirement, is something different. Namely, to get away from the jargon and hype of financial media, simplify your approach, and take a straightforward path toward preserving capital in a time of uncommon threats to your wealth. I look forward to sharing insight on that in the coming days.
Comments provided are informational only, not individual investment advice or recommendations. Sungarden provides Advisory Services through Dynamic Wealth Advisors
I am an investment strategist and portfolio manager for high net worth families with over 30 years of industry experience. A thought-leader, book author and founder of a boutique investment advisory firm in South Florida. My work for Forbes.com aims to break investment myths and bring common sense analysis to my audience. Connect with me on Linked In, follow me on Twitter @robisbitts. Visit our website at www.SungardenInvestment.com
Creative Planning President and Founder Peter Mallouk discusses why he thinks the economy is in good shape, who should look to alternative investing and how to invest for retirement. He also discusses why he is not a fan of crypto.
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