Friday, May 6, 2016

Why You Should Consider Retiring Abroad



In the U.S. alone, there are 10,000 baby boomers retiring every day, a trend expected to continue for the next 15 years. This means that about 3.6 million Americans are retiring each year. And more Americans are retiring outside of the U.S. every year, as evidenced by almost 375,000 retirees receiving their Social Security checks overseas in 2013 (the latest data published by the Social Security Administration).

The dollar has appreciated against most foreign currencies. Thanks to this exchange rate, purchasing property overseas has become relatively reasonable and certainly much less expensive than the purchase of similar property here in the U.S. The cost of living in most overseas locations is a good deal less, which means you can maintain a better lifestyle and your savings will last longer.
In addition, although the cost and quality of health care varies substantially from country to country, there are many overseas locations that offer health care services similar to what is provided in the U.S. and usually at a great deal less.

As you research overseas locations you should select some destinations and check to see how they compare to your needs and expectations. Considerations should be:

Lifestyle/cost of living. Is the beach important, what about restaurants, shopping, skiing, the arts, etc.? Do you want to live near the mountains or near the beach or even both? What lifestyle will your budget provide?

Climate. Many overseas retirement destinations are hot and humid, while some can be chilly and others have a rainy season lasting several months. How does climate affect your decision?

Health care. Do you have medical problems or a medical condition that requires special medical attention or require that you live near a hospital? What kind of health care is available in the country you select, what are the costs and is this available locally?

Time to travel/ease of travel. If you plan to return often to the U.S. to visit friends and family, or if you want them to visit you; if you have health issues and need to return to take care of them this is an important consideration.

Safety. If you don't feel safe, you may not feel comfortable in certain overseas locations.

Politics/government/local laws/stability. How comfortable are you living in a country with anti-American leanings, or where you must be careful with your interactions with the police or local politicians?

Natural disasters. Some places have hurricanes, volcanoes, earthquakes, flooding, etc. and their infrastructure is not set up to handle them.

The arts. How important is access to museums, opera, symphony, ballet, theater?

Sports. Do you wish to play golf, tennis, ski, run, bike, hike, scuba dive, or climb mountains? Do you wish to be able to attend professional or amateur sporting events? Is it important to view sporting events on TV?

Shopping. Is shopping important to you? What about shopping for food, clothes or staples?

Language. Are you comfortable in a country where English is not the native language and perhaps is not spoken or understood by many of the locals?

As you do your research on retiring, relocating abroad check out our content in this area including a chart evaluating many destinations according to cost of living, health care, climate, etc. and links to help you evaluate how far you money will go in over 300 countries, IRS tax implications and much more

Wednesday, April 20, 2016

The Best Alzheimer’s Resource on the Net



By Art Koff. Founder RetiredBrains.com

Every year more and more people are diagnosed with Alzheimer’s. As baby boomers come of age, the number of people afflicted with Alzheimer’s disease is expected to reach 13.8 million by 2050. This is millions more than previously expected. Of the millions who have this disease today as many as half don't have specific arrangements to help them get care. Health care costs for those with the disease and for people who have other forms of dementia are more than three times higher than costs for older Americans who are not afflicted.

If you are concerned about yourself or a loved one and wish to see recent Alzheimer’s research as well as see the answers to the questions you might have about this disease, this is the place to find it.

Our just completed Memory Loss & Alzheimer’s Section includes hundreds of links to where additional information can be found and the resources our viewers have requested.

Below are some of the resources included
·       Adult Day Programs

Please pass this information on to those you feel will find it helpful.

Note: Should you be aware of content that we have not included we would appreciate your passing it on.  Please contact us placing Alzheimer’s in the subject line.

Friday, April 8, 2016

How to figure out how much risk to take with your retirement money

By Art Koff Published on MarketWatch March 29, 2016

Are your investments too risky? For those who are retired or near retirement, this is a particularly important question because they have a shorter investment horizon. If you suffer a large loss now, you don't have a great deal of time for your investments to recover. This is exactly what happened in 2008 to many people.
On the other hand, we are living longer, so you are likely to still need to get some growth out of your investments in order to make sure you don't outlive your savings. It is certainly difficult to grow your investments without taking at least some risk.
There is currently plenty of anxiety in the markets, either real or imagined: China's growth or contraction, Britain departing from the European Union, oil crash ripples, recession fears, political uncertainty in the U.S. in an election year, market volatility, interest rates, and global terrorism.
The question is how should you adjust investments to maximize safety while still enjoying a combination of return and growth potential? The answer is your "risk tolerance" or the amount of risk you should be taking in your portfolio. Everyone should know their risk tolerance and everyone's risk tolerance is different. Your adviser should help determine this, or you can use one of the many online tools to help.
This is more important than ever. A recent study by ERBI has shown that only 21% of Americans are "very confident" they have enough money for retirement. As a result, a number of pre-retirees feel they must invest in vehicles which are expected to provide adequate income, but some carry undue risk. "We occasionally see instances of near-retirees trying to throw a 'Hail Mary' pass in order to hit their retirement goals," says risk tolerance expert Kendrick Wakeman, CEO of FinMason, Inc, "but it's better to increase savings and/or adjust retirement expectations than to potentially lose retirement completely."
The question is how should you adjust to maximize safety while still enjoying a combination of return and growth potential? Nearly 80% of workers underestimate how much they will need to save for their retirement.
How much investment is needed for your retirement years depends on a number of factors. Your current age, what age you plan to stop working, how much income you project you will need, what your current financial situation (net worth) is, are you likely to inherit substantial funds prior to or during retirement, and how long you will need your retirement money to last.
Each investor must make her or his retirement investment decisions based on their particular needs. Recommendations that are designed for everyone are just not appropriate.
Here are some tools to evaluate your needs:
This questionnaire helps you determine your risk profile.
This calculator uses helpful charts to let you gauge your risk tolerance and compare it to your current portfolio.
This calculator will estimate your personal risk over the next 5, 10, or 15 years. Risk Calculator.
This calculator uses helpful charts to let you gauge your risk tolerance and compare it to your portfolio.
This is a more academic approach with an extensive set of psychological questionsdesigned to determine your risk tolerance.
T. Rowe Price Retirement Income Calculator (you must register as a guest to use).
Fidelity Retirement Score (answers 6 questions to see where you stand.
For more in-depth information, check out these articles:
Increase your retirement income (Annuities, Social Security, Reverse Mortgage and more.)

Saturday, March 26, 2016

Where Can I Put My Retirement Savings So IT Won't Get Whacked By The Stock Market?



By Walter Updegrave, RealDealRetirement @RealDealRetire

It seems I keep losing money in my retirement accounts these days. Is there a safe place I can invest my savings so that at least it won’t be affected by the stock market?
—L.W.

Sure, there are plenty of places you can put your retirement nest egg to protect it from a
possible setback in the stock market. You could move it into cash equivalents such as a money market fund, an FDIC-insured savings account or CDs. Some investors have even been flocking to gold lately as a refuge for uncertain times.

But the question is should you?

Cash equivalents are very secure and stable, but they
yield virtually nothing these days. So you’re paying for security by accepting very low rates of return that may make it difficult for you to build an adequate nest egg that can support you in retirement.

And while gold has shown that it can hold up well, or even thrive, when stocks run into trouble, it’s not as if gold is a model of stability that rarely drops in value. On the contrary,
gold can be even more volatile than stocks and is given to steep periodic losses, witness the fact that, after soaring to nearly $1,900 an ounce back in 2011 amid concerns about European debt levels, gold has since declined to just over $1,200 an ounce, a slide of about 35%.

Fact is, while moving your retirement stash to one of the alternatives mentioned above, or other putative havens for that matter, may be “safe” in the sense that it can shield you from a market downturn, it
leaves you vulnerable to other risks. So in trying to protect yourself, you may actually be doing the opposite.

So what do I recommend instead?
Basically, I suggest you try to achieve a balance between the security you seek from short-term downdrafts in the stock market and the long-term returns you need to achieve goals like accumulating enough savings to support you through what can be a long retirement. To my mind at least, the most sensible way to do that is by investing your savings in a low-cost mix of stocks and bonds that’s conservative enough to afford reasonable protection from market turmoil but aggressive enough to generate the long-term returns you’ll need to achieve your financial goals.

The appropriate mix of stocks and bonds can vary from person to person for any number of reasons, including age, the size of your nest egg, how much you have in the way of other resources to fall back on and
how you react to investment losses. But the best way to start figuring out what blend of stocks and bonds makes sense for you is to get a sense of how much risk you can comfortably take on, which you can do by completing a risk tolerance-asset allocation questionnaire like the one Vanguard offers free online.

After answering 11 questions that get at such issues as how large a loss you can handle before you freak out and how long you expect to keep your money invested, you’ll receive a suggested
mix of stocks and bonds, as well as access to stats showing how that mix and others more conservative and aggressive have performed in both good and bad markets. While those stats can be helpful, I recommend you go a step further and also estimate how the suggested portfolio would have performed in a severe bear market like the one that began in late 2007 and continued through early 2009, when stocks lost nearly 60% of their value and bonds gained almost 8%.

Such an exercise can give you a better feel for how you might react should you have to deal with a similar market meltdown. For example, a blend of 70% stocks and 30% bonds would have lost roughly 35% from the peak of the last bull market to the trough of the bear (assuming no
rebalancing). If seeing the value of your savings decline by that amount would have had you bailing out of stocks in a panic, then you might want to rein in your allocation to stocks a bit.

That said, you don’t want to lean so far towards security that you end up with anemic returns that make it harder to achieve your goals. So when you think you may have a stocks-bonds mix that’s right for you, test it again by plugging it into a good
retirement income calculator. That should tell you whether your investing strategy, combined with how much you’re saving (or spending, if you’re already retired) will keep you on track toward a secure retirement. Once you’ve arrived at a suitable portfolio, don’t mess with it, except to rebalance periodically, do the occasional portfolio check-up and perhaps shift more toward bonds as you near and enter retirement.

Going through the exercise I’ve described above won’t completely insulate you from stock market setbacks. But that’s not the aim. Rather, the goal is to provide enough protection to allow you to ride out the
inevitable stock market slumps and then participate in the recoveries, which is a more effective strategy than trying to anticipate the market’s ups and downs.
So by all means keep some of your portfolio in cash equivalents—enough to cover at least three months’ worth of expenses during your career and anywhere from one to three years’ worth of spending in retirement. But aside from such an emergency cushion or spending reserve, the rest of your savings should be invested in a way that gives you the best shot at getting through periods of market turmoil without sacrificing too much in long-term gains.

Walter Updegrave is the editor of 
RealDealRetirement.comIf you have a question on retirement or investing that you would like Walter to answer online, send it to him at walter@realdealretirement.com.

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