That's gonna do it for our inaugural celebration of National Retirement Planning Month this July. Special thanks to Ann Fry, Jeff Thredgold and Kendra Todd for being my guests during our teleseminar series. Also, special thanks to all of you who stopped by this blog to check out our daily entries during the month. We'll be back next July 2008! Until then, take care of yourself.
For information about National Retirement Planning Month, to suggest a potential guest for next years free teleseminar series, please contact Bill Losey at 1-866-786-2521 or by visiting www.MyRetirementSuccess.com.
Tuesday, July 31, 2007
Monday, July 30, 2007
The Dow's Big Drop
Can the market recover from its worst week in five years?
Last Tuesday, the Down Jones Industrial Average dropped 226 points. On Thursday, it dropped 311 points further. On Friday, it dropped another 208 points. The NASDAQ and S&P 500 suffered huge selloffs as well. Wall Street analysts now wonder: have the bulls run away, or is this just a necessary correction to an overvalued stock market?
The bearish scenario. If there is one root factor for the market’s descent in the last five days, it is the presumption that credit standards are tightening, meaning fewer leveraged loans to enable corporate buyouts and a higher cost of capital for companies and individuals. Throw in a sputtering housing market, high oil prices and the possibility of the Federal Reserve raising interest rates upon an improved second-quarter GDP, and the stock market may be poised for a downward phase or a period of stagnation.
The rebound scenario. Here’s the other take on last week: the stock market is more volatile and emotionally driven than ever before, and what happened last week was just the new volatility. As Charles Schwab & Co. director of derivatives Randy Frederick noted, “You look at a 300-point Dow day and it seems like a big day, but from a percentage viewpoint it's not a big move." The major indexes are still up 3-6% this year even with last week’s market shock. Optimists (and realists) believe Wall Street will soon rebound, maybe not next week but in the near future, when postive earnings reports and stimulating economic data appear. In this school of thought, the global economy is so strong that investors will remain bullish through virtually any crisis, and as hard as last week was to accept, it was simply an inevitable response to an overvalued stock market.
Some perspective. What we saw last week was no Black Friday (the day in 1987 when Wall Street sank almost 20% in eight hours), but perhaps a painful new part of the Wall Street landscape. It is worth noting that since 1985, the Dow Jones has grown an average of 8.6% annually – history to cheer any stock market investor. As for where we go from here, the next economic indicator to watch is the next jobless claims report from the Labor Department, which will be released next Friday (August 3).
Last Tuesday, the Down Jones Industrial Average dropped 226 points. On Thursday, it dropped 311 points further. On Friday, it dropped another 208 points. The NASDAQ and S&P 500 suffered huge selloffs as well. Wall Street analysts now wonder: have the bulls run away, or is this just a necessary correction to an overvalued stock market?
The bearish scenario. If there is one root factor for the market’s descent in the last five days, it is the presumption that credit standards are tightening, meaning fewer leveraged loans to enable corporate buyouts and a higher cost of capital for companies and individuals. Throw in a sputtering housing market, high oil prices and the possibility of the Federal Reserve raising interest rates upon an improved second-quarter GDP, and the stock market may be poised for a downward phase or a period of stagnation.
The rebound scenario. Here’s the other take on last week: the stock market is more volatile and emotionally driven than ever before, and what happened last week was just the new volatility. As Charles Schwab & Co. director of derivatives Randy Frederick noted, “You look at a 300-point Dow day and it seems like a big day, but from a percentage viewpoint it's not a big move." The major indexes are still up 3-6% this year even with last week’s market shock. Optimists (and realists) believe Wall Street will soon rebound, maybe not next week but in the near future, when postive earnings reports and stimulating economic data appear. In this school of thought, the global economy is so strong that investors will remain bullish through virtually any crisis, and as hard as last week was to accept, it was simply an inevitable response to an overvalued stock market.
Some perspective. What we saw last week was no Black Friday (the day in 1987 when Wall Street sank almost 20% in eight hours), but perhaps a painful new part of the Wall Street landscape. It is worth noting that since 1985, the Dow Jones has grown an average of 8.6% annually – history to cheer any stock market investor. As for where we go from here, the next economic indicator to watch is the next jobless claims report from the Labor Department, which will be released next Friday (August 3).
Friday, July 27, 2007
Weathering Volatile Markets
Stock markets are plummeting. The stock market is a nasty roller coaster ride.
Do you talk this way? I don't either but that's how the media works. Sexy, scary headlines get your attention and appeal to your emotions. Then your emotions make you think and act differently than you know you should. My advice: turn off the TV, stop reading the newspapers, and stop listening to the radio for a few days. All this negativity will evaporate eventually.
Listen, this mini 2-3% correction was long overdue. The markets have had an incredible year and this normal volatility is the price we pay for trying to stay ahead of inflation. Make sure you know how your money is invested and how much risk you're taking. If you do, don't do anything right now but sit tight.
Do you talk this way? I don't either but that's how the media works. Sexy, scary headlines get your attention and appeal to your emotions. Then your emotions make you think and act differently than you know you should. My advice: turn off the TV, stop reading the newspapers, and stop listening to the radio for a few days. All this negativity will evaporate eventually.
Listen, this mini 2-3% correction was long overdue. The markets have had an incredible year and this normal volatility is the price we pay for trying to stay ahead of inflation. Make sure you know how your money is invested and how much risk you're taking. If you do, don't do anything right now but sit tight.
Thursday, July 26, 2007
Reminder! Kendra Todd FREE Teleseminar Tomorrow
Just a quick reminder that I'll be interviewing Kendra tomorrow morning at 10am est. She is the first female winner of NBC's hit TV show "The Apprentice" and author of the best-selling book Risk & Grow Rich: How To Make Millions in Real Estate. Kendra will be sharing her ideas on risk and how to profit and achieve financial independence! I hope you'll join us!
The dial in # is: 1-605-475-4150
The participant access code is: 52642#
The dial in # is: 1-605-475-4150
The participant access code is: 52642#
Wednesday, July 25, 2007
Stretching Your IRA
Question: Where and how can I open up a Stretch IRA?
Answer: The “Stretch IRA” is not a type of an IRA such as a Traditional IRA or a Roth IRA that you open up. Instead, the term “Stretch IRA” refers to a wealth transfer concept that can be applied to your existing Traditional IRA or Roth IRA.
With the “Stretch IRA” concept, your goal is to extend for as long as possible, the term that money inside of an existing IRA will continue to grow on a tax-deferred basis. This concept is generally of interest to individuals who don’t need to take money out of their IRAs to supplement their income and/or to those who want to leave a financial legacy to their heirs.
Implementing the “Stretch IRA” concept really boils down to proper beneficiary planning on your retirement accounts. Normally an IRA owner will name a spouse or other (usually younger) person such as a child or grandchild as the beneficiary on the account. Then, each year, the owner takes his/her legally required minimum distributions. Due to IRS regulations, the methods used to calculate these annual distributions after the death of the IRA owner, can effectively extend the payout period over multiple lives and generations. Extending the payout period and number of years money inside of the IRA continues to grows tax-deferred can literally mean tens of thousands, hundreds of thousands, or even millions of extra dollars that can be spent by future generations.
Other benefits of the “Stretch IRA” concept include the potential to provide lifetime income for a chosen beneficiary or beneficiaries; and the ability to minimize your tax liability by taking out smaller distributions over time, instead of in a single, lump sum.
Bill’s Bottom-line: The “Stretch IRA” concept should be integrated into your overall estate plan. So talking with a qualified advisor and seeking the counsel of appropriate tax and legal advisors is highly suggested.
Answer: The “Stretch IRA” is not a type of an IRA such as a Traditional IRA or a Roth IRA that you open up. Instead, the term “Stretch IRA” refers to a wealth transfer concept that can be applied to your existing Traditional IRA or Roth IRA.
With the “Stretch IRA” concept, your goal is to extend for as long as possible, the term that money inside of an existing IRA will continue to grow on a tax-deferred basis. This concept is generally of interest to individuals who don’t need to take money out of their IRAs to supplement their income and/or to those who want to leave a financial legacy to their heirs.
Implementing the “Stretch IRA” concept really boils down to proper beneficiary planning on your retirement accounts. Normally an IRA owner will name a spouse or other (usually younger) person such as a child or grandchild as the beneficiary on the account. Then, each year, the owner takes his/her legally required minimum distributions. Due to IRS regulations, the methods used to calculate these annual distributions after the death of the IRA owner, can effectively extend the payout period over multiple lives and generations. Extending the payout period and number of years money inside of the IRA continues to grows tax-deferred can literally mean tens of thousands, hundreds of thousands, or even millions of extra dollars that can be spent by future generations.
Other benefits of the “Stretch IRA” concept include the potential to provide lifetime income for a chosen beneficiary or beneficiaries; and the ability to minimize your tax liability by taking out smaller distributions over time, instead of in a single, lump sum.
Bill’s Bottom-line: The “Stretch IRA” concept should be integrated into your overall estate plan. So talking with a qualified advisor and seeking the counsel of appropriate tax and legal advisors is highly suggested.
Tuesday, July 24, 2007
5 Important Questions
The questions that follow are some of the same questions I ask when assisting my private clients while discovering or rediscovering their goals. You need to have clarity and really know what’s important to you. Remember, money is just a tool to help you get what you want!
So let’s play! Take a few minutes and answer these questions. Don’t over analyze them, just answer them from your heart (not your head).
1. If money and health were no issue, how would you spend your time?
2. What types of activities would you like to participate in that you’re not now? Who would you participate with?
3. If you could, what would you be doing differently now?
4. What is your greatest passion? (If you’re not doing this, what is holding you back? Money, time, confidence, experience, etc.?)
5. What would you attempt to do if you knew you could not fail?
So let’s play! Take a few minutes and answer these questions. Don’t over analyze them, just answer them from your heart (not your head).
1. If money and health were no issue, how would you spend your time?
2. What types of activities would you like to participate in that you’re not now? Who would you participate with?
3. If you could, what would you be doing differently now?
4. What is your greatest passion? (If you’re not doing this, what is holding you back? Money, time, confidence, experience, etc.?)
5. What would you attempt to do if you knew you could not fail?
Monday, July 23, 2007
The Rule of 72
The rule of 72 is a very handy mathematical rule that helps in estimating approximately how many years it will take for an investment to double in value at varying rates of return.
If 72 is divided by an interest rate, the result is the approximate number of years needed to double the investment. For example, at a 10% rate of return, an investment will double in approximately 7.2 years; at a 12% rate of return it will take only 6 years.
If 72 is divided by an interest rate, the result is the approximate number of years needed to double the investment. For example, at a 10% rate of return, an investment will double in approximately 7.2 years; at a 12% rate of return it will take only 6 years.
Saturday, July 21, 2007
Thanks to Ann Fry & Jeff Thredgold
Special thanks to Ann and Jeff for making our inaugural National Retirement Planning Month teleseminar series great this week!
Ann Fry, CEO and Head Boomer of It's Boomer Time, was my guest Thursday. She talked about strategies that boomers can pursue to create the life they want. For more info on her and her company, please visit www.itsboomertime.com.
Economist Jeff Thredgold was my guest yesterday. He is the author of ECONAMERICA: Why The American Economy is Alive and Well...and What That Means To Your Wallet. He offered an optimistic roadmap of our economic future and how to respond positively to the challenges we'll all face in the years ahead. You can reach Jeff at www.thredgold.com and purchase his book at www.econamerica.com.
Ann Fry, CEO and Head Boomer of It's Boomer Time, was my guest Thursday. She talked about strategies that boomers can pursue to create the life they want. For more info on her and her company, please visit www.itsboomertime.com.
Economist Jeff Thredgold was my guest yesterday. He is the author of ECONAMERICA: Why The American Economy is Alive and Well...and What That Means To Your Wallet. He offered an optimistic roadmap of our economic future and how to respond positively to the challenges we'll all face in the years ahead. You can reach Jeff at www.thredgold.com and purchase his book at www.econamerica.com.
Thursday, July 19, 2007
Teleseminar Reminders
I hope you enjoyed this mornings call with Ann Fry. She shared a wealth of information on how you can pursue the life you want with courage. You can contact her directly at www.itsboomertime.com.
Remember, tomorrow I'll be interviewing Jeff Thredgold at 12pm EST. Here's the contact info!
Dial-in #: 1-605-475-4150
Participant access code: 52642
Hope you'll join me!
Remember, tomorrow I'll be interviewing Jeff Thredgold at 12pm EST. Here's the contact info!
Dial-in #: 1-605-475-4150
Participant access code: 52642
Hope you'll join me!
Wednesday, July 18, 2007
5 Reasons Investors Fail
1. They follow investment strategies and market gurus who are not suitable for their situation.
2. They are influenced by financial publications.
3. They become overwhelmed with all the investment choices available and end up not making any decisions at all.
4. They do not have concrete financial goals and/or abandon their goals too soon.
5. They don't understand how important compounded growth is over long periods of time.
2. They are influenced by financial publications.
3. They become overwhelmed with all the investment choices available and end up not making any decisions at all.
4. They do not have concrete financial goals and/or abandon their goals too soon.
5. They don't understand how important compounded growth is over long periods of time.
Tuesday, July 17, 2007
The Many Faces of Risk
Risk means different things to different people - danger, uncertainty, opportunity and thrill. In essence, there is risk in any situation and we each have our own comfort zone. Here are a few types and a brief explanation.
Good News/Bad News Risk: The good news is you're living longer. The bad news is you're living longer. This is also called "longevity" risk. It's possible you could live for 30 or 40 years after retiring so you'll need some money put aside to last your lifetime. So start saving early and often.
Interest Rate Risk: The value of bonds and sometime stocks moves in inverse relation to interest rates. Expect volatility in fixed income investments.
Market Risk: Your stocks/bond portfolio will increase and decrease in value daily with economic and price swings in the market. Do you know how much risk your portfolio is being subjected to?
Good News/Bad News Risk: The good news is you're living longer. The bad news is you're living longer. This is also called "longevity" risk. It's possible you could live for 30 or 40 years after retiring so you'll need some money put aside to last your lifetime. So start saving early and often.
Interest Rate Risk: The value of bonds and sometime stocks moves in inverse relation to interest rates. Expect volatility in fixed income investments.
Market Risk: Your stocks/bond portfolio will increase and decrease in value daily with economic and price swings in the market. Do you know how much risk your portfolio is being subjected to?
Monday, July 16, 2007
Protecting Your Retirement Money
Question: I will retire in 5 years. How can I protect my money, both now and in the future?
Answer: When you talk about “protection”, I believe you mean principal protection. However, when I hear the word protection, I believe that what you really want to know is how to grow and manage your nest egg so it can generate a steady stream of income in the future.
Creating a steady stream of predictable income is easy. You can work with your current investment custodian and have them pay you income on a pre-determined basis. For example, many of my private clients take money two times per month to replicate their former biweekly paycheck.
Creating sustainable income is harder since we don’t know how long we’ll live. So you’ll need to monitor your withdrawals at least annually. Obviously, the less you take out, the lower inflation is, and the higher return you earn on your money, the longer it will last. Conversely, the more money you take out, the higher inflation is, and the lower your return is, the shorter your nest egg will last. Most experts agree that withdrawing 4% of your money every year beginning in year one and then increasing the amount of the withdrawal each year to account for inflation is a prudent strategy.
Creating increasing income is vital to your retirement success because the cost of goods and services is always going up. Even at a low inflation rate of 3%, you’d need to double your income in 20 years to maintain the same standard of living you have today. That’s why it’s so important to maintain at least some portion of your money in the equity (stock) market.
Answer: When you talk about “protection”, I believe you mean principal protection. However, when I hear the word protection, I believe that what you really want to know is how to grow and manage your nest egg so it can generate a steady stream of income in the future.
Creating a steady stream of predictable income is easy. You can work with your current investment custodian and have them pay you income on a pre-determined basis. For example, many of my private clients take money two times per month to replicate their former biweekly paycheck.
Creating sustainable income is harder since we don’t know how long we’ll live. So you’ll need to monitor your withdrawals at least annually. Obviously, the less you take out, the lower inflation is, and the higher return you earn on your money, the longer it will last. Conversely, the more money you take out, the higher inflation is, and the lower your return is, the shorter your nest egg will last. Most experts agree that withdrawing 4% of your money every year beginning in year one and then increasing the amount of the withdrawal each year to account for inflation is a prudent strategy.
Creating increasing income is vital to your retirement success because the cost of goods and services is always going up. Even at a low inflation rate of 3%, you’d need to double your income in 20 years to maintain the same standard of living you have today. That’s why it’s so important to maintain at least some portion of your money in the equity (stock) market.
Friday, July 13, 2007
5 More Practical Tips To Consider In Long Term Care Insurance
1. LTC insurance is a specialized field requiring a specialized expertise. Work with an LTC specialist who can offer appropriate insights across a number of products and companies.
2. The "meat and potatoes" of an LTC policy is the amount of coverage it provides. Don't sacrifice coverage for or be lulled by bells and whistles.
3. The premiums charged by LTC companies for the same coverage can vary tremendously. Don't pay a higher premium for the same coverage.
4. A good LTC policy does not need to pay 100% of all LTC costs. In fact, the best policy is the smallest one that will help you avoid a catastrophe.
5. If you belong to an organization that offers a "group" LTC insurance plan, you should at least compare it to the individual LTC market. Most group LTC policies offer limited benefit choices, are usually more expensive than polices purchased in the individual market, and may have design issues.
2. The "meat and potatoes" of an LTC policy is the amount of coverage it provides. Don't sacrifice coverage for or be lulled by bells and whistles.
3. The premiums charged by LTC companies for the same coverage can vary tremendously. Don't pay a higher premium for the same coverage.
4. A good LTC policy does not need to pay 100% of all LTC costs. In fact, the best policy is the smallest one that will help you avoid a catastrophe.
5. If you belong to an organization that offers a "group" LTC insurance plan, you should at least compare it to the individual LTC market. Most group LTC policies offer limited benefit choices, are usually more expensive than polices purchased in the individual market, and may have design issues.
Thursday, July 12, 2007
5 Practical Tips To Consider In Long Term Care Insurance
1. LTC insurance is not a commodity; it's part of a financial planning strategy that's intended to address YOUR unique objectives and individual concerns. Don't buy a policy that works for someone else.
2. Assume the following: If you buy a LTC insurance policy, you'll pay premiums for may years and never become disabled. But, if you don't buy a policy, you'll become disabled and suffer a financial catastrophe. Which "mistake" would you rather make?
3. Unless you're at least 80 years when you buy it, an adequate LTC policy must include automatic, 5 percent compound inflation increases. Period!
4. There's no such thing as "the best policy", "the best company" or "the ideal benefit package." Everything should be tailored to your needs and circumstances. The only optimal policy is the one that's optimal for YOU.
5. The "average" chronic LTC episode (about 3.75 years) is irrelevant. Say 4 people have LTC episodes: 3 die (or recover) in 4 months; the fourth has a 14-year stay. That averages out to 3.75 years! When buying a LTC policy, focus on the catastrophic LTC episode, not the "average" episode.
2. Assume the following: If you buy a LTC insurance policy, you'll pay premiums for may years and never become disabled. But, if you don't buy a policy, you'll become disabled and suffer a financial catastrophe. Which "mistake" would you rather make?
3. Unless you're at least 80 years when you buy it, an adequate LTC policy must include automatic, 5 percent compound inflation increases. Period!
4. There's no such thing as "the best policy", "the best company" or "the ideal benefit package." Everything should be tailored to your needs and circumstances. The only optimal policy is the one that's optimal for YOU.
5. The "average" chronic LTC episode (about 3.75 years) is irrelevant. Say 4 people have LTC episodes: 3 die (or recover) in 4 months; the fourth has a 14-year stay. That averages out to 3.75 years! When buying a LTC policy, focus on the catastrophic LTC episode, not the "average" episode.
Wednesday, July 11, 2007
How To Safeguard An Investment Portfolio During Retirement
For an investment portfolio to grow and combat inflation during decades of a successful retirement, long-term capital appreciation, which only stocks have generated, is required. The focus is on the portfolio's total returns, rather than only interest and dividends.
Annual total returns above the inflation rate is the amount a retiree can spend without effecting the portfolio's real inflation-adjusted value.
Investments can be sold to supplement dividend and interest income, but to avoid selling securities at a loss during a prolonged bear market, a money market fund should contain up to 3 years of spending needs.
Annual total returns above the inflation rate is the amount a retiree can spend without effecting the portfolio's real inflation-adjusted value.
Investments can be sold to supplement dividend and interest income, but to avoid selling securities at a loss during a prolonged bear market, a money market fund should contain up to 3 years of spending needs.
Tuesday, July 10, 2007
4 Rules To Retirement Planning
The 100% Rule: You may have heard that once you retire, you'll be able to live on 70 to 80 percent of your pre-retirement income. However, considering that medical costs are rising and life spans are increasing, you will likely need close to 100 percent of you pre-retirement income in retirement.
The 2/3 Rule: The typical Social Security payment provides one-third of a retiree's income needs, according to the U.S. Social Security Administration. That means that two-thirds of your post-retirement income must come from sources other than Social Security.
The 13 Times Rule: If you'd like to receive guaranteed income payments for life from an annuity, you will need to invest about 13 times the annual income you want to have in retirement into the annuity. For example, if you want $50,000 a year in lifetime income payments from an annuity, you'll need $650,000. Per NAVA, generating $50,000 in lifetime retirement income per year without an annuity would require at least 20 times the desired annual income.
The 110 Rule: Since it is likely you will live a long life, you may need to keep a higher percentage of assets in equity investments. Consider subtracting your current age from 110. The result could be considered a starting point for your equity investment allocation. For example, if you are 65, consider allocating 45% of your portfolio to equity investments (110-65 = 45) and 55% to fixed income investments.
Please note that these rules are approximate figures and might not be applicable to your situation. There are multiple factors that are taken into account for each individuals situation.
The 2/3 Rule: The typical Social Security payment provides one-third of a retiree's income needs, according to the U.S. Social Security Administration. That means that two-thirds of your post-retirement income must come from sources other than Social Security.
The 13 Times Rule: If you'd like to receive guaranteed income payments for life from an annuity, you will need to invest about 13 times the annual income you want to have in retirement into the annuity. For example, if you want $50,000 a year in lifetime income payments from an annuity, you'll need $650,000. Per NAVA, generating $50,000 in lifetime retirement income per year without an annuity would require at least 20 times the desired annual income.
The 110 Rule: Since it is likely you will live a long life, you may need to keep a higher percentage of assets in equity investments. Consider subtracting your current age from 110. The result could be considered a starting point for your equity investment allocation. For example, if you are 65, consider allocating 45% of your portfolio to equity investments (110-65 = 45) and 55% to fixed income investments.
Please note that these rules are approximate figures and might not be applicable to your situation. There are multiple factors that are taken into account for each individuals situation.
Monday, July 9, 2007
Teleseminar Dial-In # & Participant Access Codes Announced
Hey gang! The teleseminar dial-in number and participant access code for all three teleseminars are the same. Please note that no reservations are necessary. Here they are...
Dial-in #: 1-605-475-4150
Participant access code: 52642
Hope you'll join me and my guests...
Ann Fry - Thursday, July 19th at 10am EST
Jeff Thredgold - Friday, July 20th at 12pm EST
Kendra Todd - Friday, July 27th at 10am EST
See prior posts for all the details!
Dial-in #: 1-605-475-4150
Participant access code: 52642
Hope you'll join me and my guests...
Ann Fry - Thursday, July 19th at 10am EST
Jeff Thredgold - Friday, July 20th at 12pm EST
Kendra Todd - Friday, July 27th at 10am EST
See prior posts for all the details!
Friday, July 6, 2007
The "Silent" Risk
It’s always there but you never see it. I’m talking about inflation people.
The stuff you buy today is gonna cost you more tomorrow, and the year after that, and the year after that. And even at a low inflation rate of say 3%, you’d need to double your income in 20 years just to maintain the standard of living you have today.
In other words, if you’re living on 50k today, you’ll need 100k twenty years from now. Put another way, if you live on 50k today, it will only buy 25k worth of goods and services twenty years from now.
Do you have an investment strategy in place that is designed to double your income in twenty years? Listen to our free teleseminars to learn how!
The stuff you buy today is gonna cost you more tomorrow, and the year after that, and the year after that. And even at a low inflation rate of say 3%, you’d need to double your income in 20 years just to maintain the standard of living you have today.
In other words, if you’re living on 50k today, you’ll need 100k twenty years from now. Put another way, if you live on 50k today, it will only buy 25k worth of goods and services twenty years from now.
Do you have an investment strategy in place that is designed to double your income in twenty years? Listen to our free teleseminars to learn how!
Thursday, July 5, 2007
The Social Security Dilemma
Question: I’m 62 and still working. Is it better to take Social Security now or should I wait?
Answer: It depends on a lot of factors.
Social Security retirement benefits usually begin at full retirement age (FRA), which is currently age 65. For those born after 1937, FRA will be gradually increased until it reaches 67 for those born in 1960 or later. A worker can earn a larger benefit by continuing to work past their FRA. However, if you’re willing to accept a permanently reduced benefit, you can collect as early as age 62. If your FRA is 65, taking retirement benefits at 62 will reduce your annual benefit by approximately 30%.
Generally speaking, if you’re still working and you take Social Security, $1 of benefits is lost for every $2 or $3 you earn over an exempt amount. Contact your tax adviser to see how taking Social Security at 62 while working could affect your tax bill. It may behoove you to wait a few years or until you stop working.
From my experience, people in poor health or with a short life expectancy may benefit from taking benefits at 62. Additionally, if you need the cash now, by all means take it. Conversely, if you don’t need the money now, are in good health, and have a history of longevity in your family, you should at least consider postponing benefits a year or two to have a permanently higher amount down the road.
Bill’s Bottom-line: If you think you’ll live at least 15 years, consider taking benefits after age 62. If you think you’ll live less than 15 years in retirement, consider taking benefits at age 62 or 63. More information is available by visiting the Social Security Administration website at http://www.ssa.gov/.
Answer: It depends on a lot of factors.
Social Security retirement benefits usually begin at full retirement age (FRA), which is currently age 65. For those born after 1937, FRA will be gradually increased until it reaches 67 for those born in 1960 or later. A worker can earn a larger benefit by continuing to work past their FRA. However, if you’re willing to accept a permanently reduced benefit, you can collect as early as age 62. If your FRA is 65, taking retirement benefits at 62 will reduce your annual benefit by approximately 30%.
Generally speaking, if you’re still working and you take Social Security, $1 of benefits is lost for every $2 or $3 you earn over an exempt amount. Contact your tax adviser to see how taking Social Security at 62 while working could affect your tax bill. It may behoove you to wait a few years or until you stop working.
From my experience, people in poor health or with a short life expectancy may benefit from taking benefits at 62. Additionally, if you need the cash now, by all means take it. Conversely, if you don’t need the money now, are in good health, and have a history of longevity in your family, you should at least consider postponing benefits a year or two to have a permanently higher amount down the road.
Bill’s Bottom-line: If you think you’ll live at least 15 years, consider taking benefits after age 62. If you think you’ll live less than 15 years in retirement, consider taking benefits at age 62 or 63. More information is available by visiting the Social Security Administration website at http://www.ssa.gov/.
Tuesday, July 3, 2007
The Baby Boomer Retirement Movie
I decided to give you something to smile about on this nice summer day. Have a safe and happy 4th of July.
Take a look at my newly released “Baby Boomer Retirement Movie” at http://www.thebabyboomerretirementmovie.com/ for a quick smile. Enjoy!
Take a look at my newly released “Baby Boomer Retirement Movie” at http://www.thebabyboomerretirementmovie.com/ for a quick smile. Enjoy!
Monday, July 2, 2007
Do I Need $1,000,000 To Retire Comfortably?
Not at all. While accumulating a seven figure portfolio is a goal for many people, it isn't the end all be all. It all depends on the kind of lifestyle you desire. The most important point is to start saving as much as possible, as early as possible. Time and the compounding of your money are two keys to your retirement success.
Subscribe to:
Posts (Atom)