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State Money Woes May Affect Where You Retire
Tweet Share on Facebook May 29, 2009 Comment (1)The recession is causing long-term problems for the states, including budget deficits, service cuts, and public-worker pension shortfalls—none of which will disappear quickly. They will, however, raise pressure for tax increases. A third of states have already raised taxes this year, and more will be forced to do so. Significant cost and service gaps among the states will make retirement relocation decisions increasingly important. Here are some key variables that may affect where you want to live:
Budget problems. If you live in Montana, North Dakota, or Wyoming, congratulations: According to the Center on Budget and Policy Priorities, you live in the only states that have no budget deficit. Collectively, the states are looking at more than $350 billion in red ink over the next few years and the federal stimulus package represents a band-aid but no cure. "It may be particularly difficult for states to recover from the current fiscal situation," the Center on Budget and Policy Priorities said in a recent study: "The decline in housing markets has already depressed consumption and sales taxes as people refrain from buying furniture, appliances, construction materials, and the like. Property tax revenues are also affected, and local governments will be looking to states to help address the squeeze on local and education budgets." According to the center, here are the five worst states in terms of fiscal-year 2009 budget shortfalls as a percent of general fund revenues: California, 35.5 percent; Arizona, 34.8 percent; Rhode Island, 24.5 percent; Florida, 22.2 percent; Illinois, 21.4 percent.
[See the 10 Low-Tax Places to Retire.]
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Take a Road Test of Your Driving Skills
Tweet Share on Facebook May 28, 2009 Comment (100)May is Older Americans Month. Each year, the U.S. Administration on Aging picks an apple-pie theme for the month. This year's theme: “Living Today for a Better Tomorrow.” Hard to argue with that.
My theme is a bit more specific: Make sure your driving skills are still solid. Safe driving is key to the independence of millions of older Americans, whose presence on the nation's roads is growing. By 2030, according to U.S. Census Bureau data cited by AAA, one in four drivers will be age 65 or older. -
See if You May Be a Victim of Ageism
Tweet Share on Facebook May 27, 2009 Comment (1)Remember the old saw, “You’re only as old as you feel?” It needs to be replaced. Everyone, and I mean everyone, has some bad-feeling moments as they cross into their 60s, 70s and 80s. No, the new catch-phrase for aging, particularly among the “newly” aging boomers, should be, “You’re only as old as you act.”
Kay Van Norman, an aging and wellness consultant (when she’s not riding her horse in and around Bozeman, Mont.) remembers a couple of events in her life about eight years ago that marked a branch in the road of her own development and attitudes toward aging. -
Four Fitness Tips to Get and Stay in Shape
Tweet Share on Facebook May 26, 2009 Comment (3)The Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, this week has some tips for those of you who want to start going to gym but don’t know what fitness program to pursue.
Question: I am mid-50s and want to start going to gym but don't want to over strain myself. What are the tips for someone getting started on this regime for the first time? -
Should You Manage Your Own Portfolio?
Tweet Share on Facebook May 22, 2009 Comment (8)Self-directed investing—that is, managing one's own portfolio—makes sense for savvy retirees who want more control and lower investment fees. It's especially logical for the newly risk-adverse: people who are not trying to break the bank but protect their nest eggs from breaking, as many did during the market meltdown. But taking direct responsibility for your investments is not for everyone. Follow this guide to see if there might be at least a sliver of Warren Buffett in you.
What's y our investment IQ? You need not be another Sage of Omaha to be a great manager of your own portfolio. But you do need a basic understanding of stocks, bonds and alternative investments. "You need to put as much energy and investment into your own education as you do into your investing," says Lee Barba, head of thinkorswim Group, an online broker that offers extensive education programs through its Investools affiliate. The tax consequences of your investment actions are often the deciding factor in making the best choice, so you need to know the tax treatment of your investment-account contributions, investment earnings, and distributions. You'll also need time to get comfortable with the language of buying and selling, especially since most of your investment activity will be taking place between you and a computer screen.
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Low CPI Creates Medicare Winners and Losers
Tweet Share on Facebook May 19, 2009 Comment (84)Medicare Part B, which covers physician and outpatient services, will most likely levy no premium increase on about 30 million participants in 2010 and perhaps 2011 as well. Their good fortune, however, will be effectively paid for by the program's 10 million or so other participants. They will see premiums rise by a projected 8 percent in 2010 and another 13 percent jump in 2011. This discrepancy is an ironic consequence of a piece of good news, namely that very low levels of inflation are expected to result in no cost-of-living-adjustment (COLA) for Social Security recipients in 2010 and, quite likely, 2011.
Basic Medicare includes Part A coverage of hospital services, fully paid for by the federal government, and Part B, where the government foots 75 percent of the cost and participants must pay the remaining 25 percent, in the form of insurance premiums. Basic Part B premiums are $96.40 a month. Additional amounts, ranging as high as $211.90 a month, are charged on top of the basic premium, beginning with people who make more than $85,000 (individual tax return) and $170,000 (joint filers) a year. -
Tips for New Boomer Grandparents
Tweet Share on Facebook May 18, 2009 Comment (1)The Boomerater (tm) Report, our weekly collaboration with online baby boomer resource Boomerater, looks at valuable tips on being a new boomer grandparent and some great ideas to get prepared for this new role.
Q. We're about to become first-time grandparents and would like to hear tips from others to make this is the best experience for our new grandchild and our son and daughter-in-law. We have a good relationship with the kids and live close by. I want to be supportive and helpful, but don't want to overstep boundaries in my role as mother-in-law.
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How to Get Your Finances Back on Track in 6 Steps
Tweet Share on Facebook May 15, 2009 Comment (89)The downturn has stopped accelerating, stocks have perked up, and the banking system is healthy enough to withstand more economic adversity (with a manageable amount of additional taxpayer money). Economic reports are being sifted for signs of "green shoots" that signal economic recovery. On a personal level, it's time to come out of our bunkers, survey the damage, and get on with our lives. In financial terms, picking up the pieces may not be a pleasant exercise, especially for people in or near retirement age (or what they had hoped would be retirement age). But it needs to be done, and here are six steps to follow:
Understand your new reality. The future will not be like the past. At best, many experts agree, it will take at least two years to recover market losses, and it could take a decade if the recovery is slow. Most retirement-plan participants are not investors--they're savers. These investors never intended to actively manage their 401(k) and IRA holdings. Instead, they aimed to buy and hold, watch their investments grow over time, and then use the resulting nest egg to support a pleasant and lengthy retirement. Even during the worst of the market meltdown, the big mutual fund companies report that retirement-plan participants kept their funds in place and continued making contributions. Now, it's time to take a clear-headed view of account holdings and make a realistic judgment of your new retirement glide path. ING has an easy-to-use calculator,and there are lots of others. Their underlying assumptions may differ, so use a few to develop a consensus outlook that feels right to you.
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Six Pillars of Solid Retirement Communities
Tweet Share on Facebook May 14, 2009 Comment (175)John Erickson has the conviction of success. More than 22.000 people live in his 20 retirement communities in 11 states. He opened the first outside of Baltimore in 1983, at a time when large, apartment-oriented facilities were considered unappealing by many experts. Today, Erickson Retirement Communities has grown into one of largest Continuing Care and Retirement Community (CCRC) operators, and is widely considered at the top of the industry in quality and consumer appeal. Erickson himself has reached traditional retirement age but clearly has no interest in slowing down.
Erickson's facilities are big but broken down into multiple clubhouses, low-rise apartment buildings and interconnected facilities that permit residents to walk the entire complex without going outside. As with other CCRCs, residents have a continuum of living and care options depending on their physical conditions and medical needs. The most common purchasers are healthy couples in their mid-to-late 70s who move into independent living apartments and continue to keep their cars. Over time, they likely will need increasing amounts of medical care and can find assisted-living and more advanced nursing care within their community. Most expenses are covered with a single monthly payment and the initial purchase price of the apartment is refundable to the buyers or their heirs. -
Social Security, Medicare Busts Move Closer
Tweet Share on Facebook May 12, 2009 Comment (138)The annual hair shirt report of Social Security trustees was released on Tuesday. To no one's surprise, our national retirement and health benefit programs are headed for perdition even more quickly than they were last year. Due to the recession, the effective bankruptcy date is 2037 for what's technically called the Old-Age and Survivors, and Disability Insurance (OASDI) Trust Funds. That's four years earlier than the forecast in last year's report -- no mean feat in only one year. Program expenses exceed revenues beginning in 2016 -- that's only seven years away, folks -- and all assets are exhausted 21 years later.
And this, sadly, was the good news.
