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Contact LindaImagine approaching retirement and watching your portfolio be cut in half. Maybe you don’t have to imagine, because it happened to you in 2008. While there are no surefire ways to avoid a stock market crash, there are some things you can do to reduce the likelihood that you will suffer the consequences of one in the future. Here’s how to protect your savings from a significant downturn in the financial markets.
1. Don’t invest in the stock market.
The best way to avoid a crash is not to get involved in the stock market in the first place. However, you aren’t likely to get a decent return without putting at least some of your money into equities. And few people can save enough to retire comfortably without the help of compounding investment returns. However, there are some relatively safe ways to invest without losing your money to a crash.
2. Play it safe with fixed and fixed-indexed annuities.
If you want to avoid stock market volatility, still make a return and are willing to hand over a chunk of cash to an insurance company, an annuity will give you both safety and growth and can provide fixed payments for a set period of time or even the rest of your life. If you’re looking for guaranteed returns, and don’t want anything to do with the risk of the stock market, annuities might be a good option for you. For example, if you find a five-year fixed annuity paying over 3 percent, at least you are able to offset inflation.
With bank interest rates too low for too long and a stock market that goes up and down based on the latest news headline or Presidential Tweet, it’s as important as ever to understand ALL of your options when it comes to protecting your nest egg. RISK IS NOT YOUR FRIEND when you retire.
Linda is licensed to help you keep your money safe.
Contact LindaHere are some of the basics:
Beyond these basics, many people (but not everyone) should to consider Living Trust planning if their objectives include avoiding the expense, delays and red tape of a court supervised probate estate administration. Different types of trusts may be appropriate to accomplish particular objectives, such as preserving assets against future long-term care costs and Alzheimer’s expenses (through long-term health care estate planning), or protecting assets for beneficiaries who aren’t good at managing money or have divorce, creditor or lawsuit worries, or to build wealth (through grandchildren’s trusts, or IRA Beneficiary Trusts).
Knowing typical estate planning terms and basic concepts and reasons for particular types of planning can help you to understand what will be the right plan for you.
Linda is licensed to help you keep your money safe.
Contact LindaLinda is licensed to help with all of your Retirement Income planning needs.
Contact LindaYou’ll most likely spend your pre-retirement years accumulating assets through saving and investing. Once you hit retirement, the idea is to use these assets in a way that will provide you with a cash flow that will try to match your spending. Having assets during retirement is a great thing, but it you can’t effectively draw on your wealth to satisfy your spending in retirement, it won’t adequately serve your retirement needs.
Picture this: You’ve worked hard your entire life, saving diligently for retirement. At age 65, you were living the dream. At age 75, you enjoyed a comfortable, if not luxurious, lifestyle. But at age 85, you inexplicably have run out of money.
How did the ship sink so quickly? There was an iceberg, barely visible above the water but monstrous beneath the surface – the result of mismanaged distributions, losses in the markets, low interest rates and ill-conceived budgeting. It probably doesn’t make you feel better, but you’re probably not alone in having hit that iceberg.
A nationwide survey of 1,000 adults, released last month from TIAA-CREF, shows that although a majority of Americans understand the importance of receiving guaranteed monthly income in retirement, 38 percent, have analyzed how their savings would translate into a regular “paycheck” in their golden years. Without a distribution plan that provides you with consistent income for as long as you need it, you run the risk of spending too much too soon and living out the rest of your life in the poor house – or worse, your children’s house.
You only get one shot at retirement, and you need to get it right. Consider the following tips for getting the most out of your retirement savings:
A traditional investing rule has been to subtract your age from 100 and use the result as the percentage that stocks should represent in your portfolio. This means that as you approach retirement, you’ll move away from equities and start investing more in bonds, so as to lessen your overall risk. But increasing lifespans mean some of us could spend more than 35 years in retirement, and going too conservative means older investors may outlive their savings.
A more recent guideline is to subtract your age from 110 or 120, but that still may not be appropriate for everyone. The bottom line is if you need to make your money last longer, you’ll need the extra growth potential that continuing to invest in a mix of stocks and bonds can provide. Although that may seem to contradict the apparent logic of not taking risks with your money once you hit a certain age, relying on certificates of deposit, money-market accounts and cash could be far riskier, and may mean your retirement income won’t keep pace with inflation.
For a realistic picture of what you’re able to pay out in your golden years, you need to create a retirement spending budget long before you actually stop working. Creating that budget is a necessity to help you avoid draining your nest egg. Your discretionary spending is one of the biggest factors impacting your retirement income, and it’s all in your hands.
A retirement budget should include needs (rent, food, utilities), wants (cable, cell phone) and wishes (the fun stuff you want to do in retirement, such as travel, hobbies and entertainment). To cover your bases, make sure also to account for the unexpected, such as a struggling relative in need of financial assistance, repairs and maintenance on the big-ticket items you own and medical care for any furry friends you may have.
Having a diversified portfolio with positions in a variety of asset classes is a key investing strategy designed to help smooth out the ups and downs of the markets. That being said, you should always invest according to your specific, individual goals. If you’re looking to build a portfolio that will generate cash, and are more concerned with having enough income than you are with building wealth, you may want to consider adding more fixed-income products such as Fixed or Fixed Indexed Annuities.
Whether you’re finally in countdown mode or still have 20 years until you retire, you deserve to look ahead to retirement, knowing you’ll have the income you need to afford the lifestyle you want. Running out of money is one of the biggest retirement fears, but with a little advance planning, you can develop a strategy to help your hard-earned dollars last a lifetime.
Linda is licensed to help with all of your Long Term Care planning needs.
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Planning ahead for long-term care is important because there is a good chance you will need some long-term care services if you live beyond the age of 65. About 70 percent of people over age 65 require some services, and the likelihood of needing care increases as you age.
Planning ahead helps you understand what service options are available in your community, what special conditions may apply for receiving services, for example, age or other eligibility criteria, what services cost, and what payment options – public and private – apply. Having this information helps ensure you will have a range of options when you need long-term care, and makes it more likely that you will have more choice and control over where and how you receive services.
Planning ahead is important because the cost of long-term care services often exceeds what the average person can pay from income and other resources. By planning ahead, you may be able to save your assets and income for uses other than long-term care, including preserving the quality of life for your spouse or other loved ones. With planning, there is a greater likelihood of being able to leave an estate to your heirs, because you are less likely to use up your financial resources paying for care.
Planning ahead also means less emotional and financial stress on you and your family. It can provide a way to involve your family in decisions without depending on them to bear the entire burden alone.
Finally, for many people, one of the most important advantages of planning ahead is to ensure greater independence should you need care. Your choices for receiving care outside of a facility and being able to stay at home or receive services in the community for as long as possible are greater if you have planned ahead.
There are many reasons why people don’t plan ahead for long-term care. These include the natural tendency to avoid thinking about becoming dependent on others for your care, misinformation about the risks of needing care, and lack of knowledge about the cost of care and payment options.
Most people don’t like to think about getting older, developing a disability, becoming less independent, or needing help with personal care. Many people don’t realize that their chance of needing long-term care by the time they turn 65 is as high as 70 percent.
People commonly misunderstand how expensive long-term care is, and how it is paid for. Consumer surveys have shown that many individuals don’t realize that health insurance, Medicare, and/or disability coverage do not pay for most long-term care services. Medicaid pays for some long-term care services, but only if you qualify for the program because you have limited income and financial resources.
Some people find it too difficult to raise these subjects with their loved ones, making it difficult to explore and define their plans. Adult children often feel like they are patronizing their parents if they raise the subject or they are afraid of giving the impression that they might not want to provide care if it is needed. Parents often don’t want to make adult children uncomfortable or to discuss details of their finances with them.
Finally, some people realize it is important to plan, but don’t know how to go about it. The best way to begin is with small and easy steps. Even just talking with your loved ones is a great first-step!
There are a number of possible solutions to the need for long term care for you. Here are some of the most common solutions. To get an estimate of what the cost would be in your area call a Long Term Care specialist to help you with quotes on the plan that is best for you.
1. Self-Insure – This is by far the most expensive way to pay for long term care, out of your pocket. People work their entire lives planning for retirement so they can have the income to live the lifestyle they want. To pay for long term care, you’ll have to spend your income and quickly spend down your assets – your lifestyle will change. Self-insuring is also the way many people spend their life savings only to end up on welfare (Medicaid) if they run out of money.
If you do not have long term care insurance now, you are self-insured, and if your health suddenly changed you may not qualify for insurance and would have to pay yourself.
2. Medicare / Medicare – There are serious limitations when using these as solutions. It is a form of welfare, so you have to be almost destitute to qualify. Medicaid decides where you stay and who takes care of you, thus taking away your independence. You must meet the poverty asset and income requirements and in the end, your estate can be liable for your expenses.
3. Commercial Long-Term Care Insurance – There are a number of reputable companies that offer competitive products for long term care risk. Historically this type of coverage has been considered expensive because people have waited until they were older to protect themselves.
Today, insurance companies are getting better at underwriting the long-term care risk and it is much more affordable that most people think. As with all insurance, you are betting you won’t use it, but the chances are almost certain you’ll need some long-term care. The cost for insurance is pennies on the dollar compared to the cost of care. Usually policies bought in one state are good for coverage in another state in case you move.
4. Asset-based Long Term Care Insurance – This may be a good alternative for people who have a significant asset base and don’t want to pay monthly premiums for something they are not sure they will ever need. It is actually a life insurance policy with an accelerated death benefit that can be used for long term care expenses if you need it. If you are fortunate enough to never use the long term care benefits, your beneficiaries inherit the amount of the policy. And all of it is tax-free. An example would be for age 62, a $100,000 lump sum can provide a monthly LTC benefit of $4,000 up to $250,000 and a death benefit of $150,000.
Linda is licensed to help you with all of your Medicare needs.
The Medicare StoreLinda is licensed to help with all of your Long Term Care planning needs.
Contact LindaCaregiving responsibilities can influence individuals’ retirement decisions and their post-retirement well-being. The effect of caregiving responsibilities on retirement decisions depends upon the relative balance between care-related time demands and financial needs due to care recipients’ illness or disability, as well as on factors such as gender or care relationship. Men seem more inclined to adjust retirement decisions to mesh with financial obligations; women, who usually carry the main responsibility for hands-on care, tend to respond to care-related time pressures.
The job of caregiving, while a worthwhile and rewarding endeavor, is fraught with stress and requires an incredible amount of patience and understanding.
Sometimes loved ones suffer from memory loss or have lost some physical ability. Sometimes they have medical issues that need to be tended to daily. They can require help with daily essentials such as cooking, cleaning, bathing, or using the toilet, while others may require the administration of medicine and transportation to and from the doctor. Some require round-the-clock care, giving little rest to their caretakers.
Unfortunately, stress among caregivers is extremely common. Caregivers often try to do everything by themselves, which eventually leaves them worn out and unable to fully attend to everything they are expected to do. Furthermore, ignoring the symptoms of stress can affect physical and mental health and lead to burnout, and make it impossible for the caregiver to continue caring for their loved one.
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