One solution: Donating the principal to a nonprofit in the form of a "charitable gift annuity" in exchange for lifetime fixed annuity payments. Remember the good old days, you know, when you could invest in a certificate of deposit (CD) and the bank would actually pay you something called “interest” on your deposit? No, really, I kid you not. Obviously, I am being a bit factitious, but you get the point. It is hard enough to make money these days, let alone accumulate wealth. Let’s say you are retired and are looking for a place to put your money to…
If the debt-debate in Washington gets much worse it could mean a lot more belt-tightening for America’s seniors, including changes to the COLA for Social Security, the Cost Of Living Adjustment meant to keep seniors at pace with inflation. The change proposed by both sides of Congress and the White House officials, elaborated in this SmartMoney article, is to adjust the measurement of inflation used when determining the COLA. Inflation is a fairly common concept – the general and expected upward creep of costs – but economists are less certain about the most appropriate measurement. Currently, costs of products are…
If there’s any lesson to be learned from the recent debacle in Washington, D.C., it’s this: Don’t run your personal finances the way the U.S. government does. “Don’t live beyond your means, and don’t increase your debt levels, especially when heading into retirement,” said Greg Rosica, a tax partner in the personal financial services group at Ernst & Young and a contributing author to the Ernst & Young Tax Guide 2011. “Don’t emulate the federal government.” – “How the Debt Deal Will Affect Retirees” I suppose it goes without saying that the past few weeks have been a rather tumultuous…
With long-term care insurance policies, the costs of assisted living facilities, in-home care and private nursing homes are covered. And, in many cases, these policies offer inflation protection, too. But since not many eligible consumers are signing up for policies, the companies that offer them are trying to make them more palatable. It is an unfortunate fact that healthcare costs are steadily rising and will only continue to rise in the foreseeable future. Accordingly, healthcare inflation must be considered when planning to protect your health, your family, and your financial well-being. One of the greatest threats is long-term care, especially…
Some people who thought they had covered all their bases and acted responsibly to care for loved ones in the event of a debilitating illness or incapacity are finding their plans un-done by strict banking policies. Bank of America recently updated their online security procedures, and no longer accepts a power of attorney for online banking. As Bernard Krooks wrote last week for Forbes, this strict policy came to light when Chicago resident Eva Kripke was blocked from accessing her husband’s Bank of America account. According to Krooks, Mrs. Kripke had been handling her husband Sidney’s bank accounts as agent…
When should you start taking your Social Security benefits? The current common advice is to wait as long as possible, in order to maximize your eventual monthly benefit. In fact, AARP recently launched a new online calculator to help you decide when to start taking benefits … and it clearly illustrates the benefits to claiming later. The calculator is a useful tool, and worth checking out, but as Reuters Wealth points out, the calculator is not totally neutral, and lacks advanced features that could allow you to estimate more complex situations. For example, the AARP calculator does not allow you…
Do you have the time, inclination, or the ability to manage the affairs of your aging parents? Are the issues that your aging parents are facing becoming bigger and more complicated than you can comfortably manage? Are the other demands and responsibilities of family, work and day to day life, so abundant that you are not able to provide the desired level of control, supervision, and attention to your aging parent’s issues and crises? If you are not sure, please call our office for a consultation, or visit our website, so we can help you decide if our office may…
If you’re turning 70½ this year, get ready to start taking those mandatory annual payouts (your “required minimum distributions” or RMD’s) from your IRA accounts. Unfortunately, this is not something you can afford to put off. As SmartMoney points out in a recent article, the IRS wants you to take those distributions, and pay the additional income taxes sooner rather than later, and there are stiff penalties for non-compliance. In fact, if you fail to take at least the required amount each year, the IRS can assess a 50 percent penalty on the shortfall – the difference between what you…
In today’s economy, it seems that everything old is new again … albeit with a bit of a twist. Years ago, it was common for older couples – and frequently widows – to rent out rooms for extra income. Taking in boarders was a viable way to supplement income. Well, the idea is back, with a bit of a twist. As Baby Boomers face the cold, hard facts of retirement, they are increasingly changing the definition of the term to include at least some form of work. While you may not be ready to hang out a shingle on the…
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