You have finally reached your finish line – congratulations! While retirement means different things to different people, there are a few points that can mess up everyone’s retirement. Please don’t make these mistakes:

Underestimate your medical costs.
We are living longer – this may be good – maybe it isn’t. Medical care is an expense that you need to overestimate. The average 65 yr. old couple can spend up to $260,000 in health care costs over their lifetime, many exceeding $570,000 when you factor in long term care needs.

Claiming Social Security too soon.
If you retire at age 62 and claim your social security at that time, you will take a permanent 25% cut in benefits. As mentioned above, we are living longer. If you can wait until your full retirement age or longer, you will be much better off. For each year beyond full retirement age that you defer your social security payment, you will receive an 8% increase in monthly income. You can defer up to age 70, increasing your social security by as much as 32% for most recipients.

Only thinking about your numbers.
You’ve looked at your social security and pension options, paid off your home, made peace with your taxes, now what? Economically, your retirement is set. What are you going to do with your time? You need to have a reason to get up every day – planning for this is just as important as planning the numbers. Will you work part time? Volunteer? Take classes? Babysit your grandkids? You need to plan your retirement lifestyle now, before you retire.

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Most of us have finished with our taxes for 2014; it is time to start thinking about this year. How often do you review your non-retirement portfolio? You may have some stocks or mutual funds that are winners, others may be lemons.
By selling off the lemons and matching those sales with taking some of your gains off of the table, you may be able to make those gains tax free. Remember, you have to match short term to short term, and long term to long term. If you do not have enough in gains to offset your losses, you may use up to $3000/year or carry the excess forward.

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I was listening to a competitors’ radio show over the weekend and was not very happy with what I was hearing. They kept talking about a “new asset class” of investment that is, in my opinion, anything but that. The hook is you can have all of the upside of investing but no risk to your principal + lifetime income. Another point they made was the investor did not have to pay any fees or commissions. What were they talking about? Fixed index annuities.
I have been in business for 32yrs and annuities have been around longer than that. Index annuities of any type need to be reviewed with a fine tooth comb. There are many different features and rules written into all of them. As far as paying an agent goes, true, you may not directly pay a fee or commission, but believe me, they are well compensated. Many annuities have 10yrs. or more of large surrender charges – I am not a fan of this at all. The formulas used to calculate how you are credited gains often times are very confusing.
If you are considering investing in an index annuity, read everything and ask a lot of questions. This, like any investment you choose, should be easy for you to explain to a 5yr old. Be an informed investor.

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Orlandostyle

First off, let me say that my mother is not sick or dying. I’ll admit that I was not thrilled that my mom planned her meeting with the funeral home on my birthday. I just looked at it as being a “circle of life” kind of day. My mother has been working on making sure all of those final decisions have been made for quite some time – this was the last piece to be completed. So why now? We just went through my father-in-law passing and his final plans had been made in advanced and paid for. This made my mother see how much easier things were for us to deal with at such a horrible time in a child’s life. That and the fact that is doesn’t get cheaper as the years go by.
Planning something such as a funeral while one is happy and healthy is a good thing. If there is no pressure or impending event driving the decisions, you can think calmly and clearly about what you would like as your final wish.

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My daughter will be graduating from nursing school this December and is planning her next step toward independence. She does not have any siblings, cousins are not close geographically, so we all want to make sure she can stand on her own two feet. The other night at dinner she told me she is very concerned about how to make a budget. Because I have an expense summary report, I can easily help her with this. Inside, I smiled when she voiced this concern, this is an adult concern, and maybe we won’t have to worry so much.
We have always discussed that she needs to save and not spend every cent she has, but she has not had a “real” job yet. We would like her to try to identify as many regular living expenses as she can, save 6 months of those expenses, which she should not touch, then move into her own place with confidence. We try to impress upon all of the 20 somethings that we meet that an emergency fund is a big deal. Having cash gives you choice- saving for yourself on a short term and long term basis is a must.
If my daughter’s concerns represent those graduating this year, we as parents can give ourselves a pat on the back that we have done something right for this next generation.

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Last year, the president introduced the myRetirement Account (myRA) for those who do not have access to corporate retirement plans in an effort to get more people to save for their own retirement. Employers have to set up direct-deposit capabilities for their employees to open a myRA. Other than the U.S. Office of Personal Management, no other employer has done this.
According to government sources, there are still a number of kinks to work out, thus, employers do not want to jump into the pond yet. The low income wage earners that are the target market for the myRA need to work on short-term emergency savings, get into the habit of savings, and then might take advantage of a long term plan such as the myRA.

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April 15th is fast approaching; you have your tax return done and find that you owe money that you don’t have. Where can you turn so you don’t end up compounding the problem by not paying?
• You can give yourself a loan by using a credit card. I caution you on this though. If you cannot pay your balance off quickly, you will be adding interest payments onto what you have charged to pay your tax bill.
• The bank of Mom & Dad (or other relatives). While I don’t feel that borrowing money from family members is a good idea, it is better than getting into trouble with the IRS. If you need to take this family member approach, then ask for money with a repayment plan.
• Take out a personal loan. If you have good credit, you can get a short term loan from your banking institution.

Next year, make sure you paying in as much as you owe this year, if not more, so you are not caught short again.

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