Wednesday, October 26, 2016

12 Tips to Help Retirees Avoid Being Scammed

October 12, 2016
by Art Koff

From MarketWatch 

According to the Better Business Bureau 10% of the U.S. population falls victim to consumer scams every year.

John Jupin, a former FBI special agent and retired U.S. Department of Labor — Office of Inspector General special agent gives this advice: "You may not be able to totally prevent fraud, but to minimize it is the key. The longer it goes on, the more problems you have. To minimize your exposure to fraud, I strongly suggest keeping up to date on the latest scams, as if you are aware of them, you are more likely to avoid being scammed."

You can check out a list of scams here. Below I have listed some new scams you should you should know about.

Social media has enabled scammers to reach millions of users often by creating "fake" pages promising everything from discounted tickets to sporting events to free airline flights or shopping sprees at name department stores. Official-looking Facebook pages often including the actual logos of well-known companies are used to create an air of authenticity. Sometimes these posts come from a trusted friend who was encouraged to share "the deal." Clicking on these pages can lead you into divulging your personal information.

Electronic pickpocketing
Information on credit cards using RFID chips can be stolen by thieves using relatively inexpensive portable scanners. All they need to do is get the scanner close enough to your wallet or purse to steal credit card numbers and expiration dates. Thieves can use this information to make fraudulent purchases. If you're concerned about getting ripped off by someone with a scanner place a piece of aluminum foil in your wallet as this will defeat the scanner.

12 Tips to Help Avoid Being Scammed
1. Get a mailbox that locks.
2. Do not leave personal information in your car.
3. Make sure your smart phone, laptop, iPad, etc. have pass codes to prevent unauthorized use.
4. Close any old, unused credit card accounts you do not use.
5. Set up online access to your banking accounts so you can easily check unlawful use and stop mailed statements.
6. Do not throw away documents that contain personal information like credit card statements and medical bills. Shred them first.
7. Check with your Better Business Bureau ( for authenticity of offers.
8. If a purported "employer" (company paying you on a commission basis) or a buyer or seller gives you a check and insists that you wire or deposit money back into their account, it is a scam. There is no legitimate reason for someone to give you a check and then ask that you give them a part of the money back.
9. Never assume a check has cleared, even if you get access to funds from a check you deposit, unless your bank explicitly tells you so. Just because the funds from the check say "available" in your account doesn't mean the check is good.
10. Do not accept checks for more than your asking price, commission, revenue share or salary. Demand a check for the correct amount and if this is refused, you will know it's a scam.
11. Never wire or deposit money into the bank accounts of people you do not know for any reason.
12. Resist high-pressure tactics. Scammers pressure their victims to act now to get a job, help out a friend or family member in trouble or receive payment for an item they are selling. If you are a victim report the scam immediately by filing a complaint at via its secure online complaint form. This form is shared with law enforcement and consumer groups to go after the scammers.

Here are a few sites that will help you identify scams.
Avoiding Identity Theft
The easiest and most successful way to protect yourself against identity theft is to place a credit-card freeze on your accounts. This prohibits anyone, including you and your spouse, from opening credit in your name. It will not affect your credit or cause problems with the credit cards you currently have nor will it affect your mortgage, car loans, etc.

Since scammers cannot open credit in your name, they are unable to use your identity, and identity theft becomes highly unlikely. Remember that while a credit freeze is in place you will not be able to apply for new credit cards or credit yourself.

To place a credit-card freeze on your account, you must contact the three main credit agencies.
  • Equifax 800-525-6285
  • Experian 888-397-3742
  • Trans Union 800-680-7289
If your identity has been stolen, you must notify the credit agencies listed above. You should also contact your local law enforcement agency. Complaints can be filed as well by calling 877-IDTHEFT or logging on to the Federal Trade Commission website.

Tuesday, October 4, 2016

4 Steps You Should Take to Make Sure You Don't Outlive Your Money

By Art Koff as seen in MarketWatch

According to a just-published HSBC Holdings publication 59% of those surveyed said financial security is one of the things they value most in life and 67% said a priority is having enough money for a comfortable life in retirement.*

The focus of this column is on what you can do to make sure you have enough funds to live the lifestyle you hoped to live during your retirement years and not run out of money.

Perhaps the most important single thing you should consider is to make sure your spending is at a level so that you will not run out of money. Your monthly income from investments, Social Security, pensions and other areas coupled with your withdrawal from principle must be adjusted to last you well into your 90s. This spending must include additional funds put aside for unexpected expenses like health-care problems not covered by Medicare and insurance.

It is very difficult to accurately estimate the balance between spending and income even with sound advice from a financial advisor. You must estimate your expenses, and to be safe, you must plan to have a good deal of your wealth left at the end of your life.

Sept 2. Create a budget that includes your projected monthly expenses. Include your yearly expenses and special onetime expenses separately. Vanguard has a Retirement Expenses Worksheet which should be helpful.

Note: Retirees have a tendency to substantially underestimate what they may spend on health care so estimate this area with particular care.

Step 3. Create a list of income and assets. Does your income from retirement savings coupled with Social Security benefits, pensions, etc. match your expenditures, and if not, how much must be taken from assets to cover the shortfall? Needless to say, expenses must be adjusted, as when assets are sold, this further reduces the income they produce.

Step 4. Estimate how long you will work. If it seems that your income will be far less than your expenditures consider continuing to work longer either for your current employer or on a part-time, temporary, seasonal or project basis. See here for information and help.

You can also considering working from home. See here where you can find information about hundreds of companies that provide at home work solutions. Also, you can consider starting a small business or even purchasing a franchise to generate income. See here for more information.

Be aware that if you continue working after you are receiving Social Security there will be a with-holding of $1 for every $2 you earn over $15,720 (2016 figure).

Here you can view 11 calculators from the U.S. Government including a Social Security retirement estimator and a early or late retirement benefit calculator.

MarketWatch columns to reference

Monday, September 12, 2016

How to Navigate Benefits if You’re Working Past Age 65

It’s no secret that Americans are working longer. But some are working well past traditional retirement age: the fastest-growing segment of the labor force is workers over age 65, according to the U.S. Bureau of Labor Statistics – and the growth is especially pronounced among workers over age 70.

Working longer certainly can boost the odds of a successful retirement plan via higher Social Security income, retirement account contributions and fewer total years of dependence on portfolio accumulations.

But working well past traditional retirement age does present some complications. Much of our retirement benefits structure still is geared toward a more traditional retirement age. The Medicare enrollment age is 65; Social Security’s full retirement age (FRA) is 66, on its way to 67 in 2027. Required Minimum Distributions (RMDs) must begin at age 70 ½. And the tax-deferred retirement system is predicated on the idea that older people will be in lower tax brackets when funds are withdrawn than during the traditional wealth accumulation years.

I’ve put together a Guide to Navigating Benefits if You’re Working Past Age 65, which is available as a free PDF download. You’ll receive this report free when you sign up for the free weekly email newsletter.  You’ll get weekly updates on Social Security, Medicare, investing in 401(k)s and IRAs, careers after age 50 and much more. Click here to subscribe and receive the guide.

Meanwhile, here is a summary of the key retirement planning items to keep in mind.

Social Security

Working longer is a great way to get the most out of Social Security. Benefits are calculated using a formula called the primary insurance amount, or PIA. For people working in their 60s, there’s very little sense in filing early – unless you have reason to think your life expectancy will be unusually short. Earlier filers who have income from work in 2015 of more than $15,720 are hit with a penalty (Social Security defines “income” in this context as wages from employment or net earnings from self-employment). If earnings exceed the limit, $1 will be deducted from benefit payments for every $2 earned over that amount. The withheld benefits are added back into benefits after you reach full retirement age. After that age, they can have unlimited income and receive Social Security benefits without penalty.

Likewise, there’s no reason to wait beyond age 70, even for people who are still working, since credits stop accruing at that age. However, it’s important to keep an eye on taxation of Social Security. Benefits are taxed using a “combined income” formula that is determined by adding together adjusted gross income, tax-exempt income and half of the Social Security benefit. If that total exceeds $25,000 for individuals ($32,000 for married couples), then 50 percent if the excess must be included in income for tax purposes; if it’s over $34,000 ($44,000 for couples) then 85 percent of the excess is included in your income. 


Medicare filing errors can be costly.

Eligibility begins at 65, and sign-up is automatic if you already receive Social Security benefits. If not, it’s important to sign up sometime in the three months before your 65th birthday up through the three months following, because failing to do so can lead to expensive premium penalties down the road. (Although signup can be done up until three months after the 65th birthday, but there’s a waiting period for people who don’t enroll by the end of the month that they turn 65.)

Monthly Part B premiums jump 10 percent for each full 12-month period that a senior could have had coverage but didn’t sign up. That can really add up: a senior who fails to enroll for five years ultimately would face a 50 percent Part B penalty–10 percent for each year. Penalties also are applied to Medicare Part D (prescription drugs) and Medicare Advantage plans (Part C) that include drug coverage.

Tuesday, June 21, 2016

3 Ways to Rescue Your Retirement If You’ve Fallen Behind

From Real Deal Retirement
By Walter Updegrave

I’m in my late 50s and not as prepared for retirement as I’d like to be. I have the equivalent of about one year’s salary saved in my 401(k) and that’s about it. What can I do improve my retirement prospects?

Generally, you should have six to nine times your salary tucked away in a 401(k) or other accounts by your mid-50s to early 60s to have a good shot at maintaining your standard of living in retirement. So you’re definitely short of where you ought to be.

On the bright side, at least you know you have some catching up to do. Not everyone who’s behind does. For example, a February study by researchers from Ohio State and the University of Alabama found that 27% of 55- to-60-year-olds included in the Federal Reserve’s Survey of Consumer Finances hadn’t accumulated the resources they’d need to maintain their standard of living in retirement, yet seemed to think they were doing just fine. The researchers labeled them “unrealistic optimists.”

But even though you’re behind, there’s no need to panic. You’ve got plenty of time to improve your retirement outlook, provided you’re willing to embark on a bold catch-up plan starting right now. Here are the three things you need to do.

To see the 3 ways recommend by By Walter Updegrave, retirement expert and author of Real Deal Retirement click here.

Tuesday, June 7, 2016

How to Build a Million Dollar Nest Egg from Scratch Even at 50

From Real Deal Retirement
By Walter Updegrave

Obviously, you would have a much better chance of accumulating $1 million or more in savings had you begun saving and planning for retirement 20 or more years ago. But assuming you do actually get started now—as opposed to merely planning to start—you still have plenty time to dramatically improve your retirement prospects.

As to whether you can realistically expect to accumulate a seven-figure nest egg by the time you retire, well, that depends on a number of factors, but mostly boils down to how diligently you save and how long you’re willing to continue working. Even with very optimistic assumptions, however, I’d say you’re most likely looking at a long shot.

5 Ways To Tell If You’re Really Ready To Retire

For example, a 50-year old starting from scratch who earns $80,000 a year, gets 2% annual raises and earns a 6% annual return on investments would have to save 30% of salary each year for the next 20 years to crack the $1 million mark. Saving that large a percentage of salary year in and year out would require a Herculean effort under any circumstances. I think it’s fair to say it’s even harder to go from saving nothing to 30% virtually overnight.

At the risk of sounding Pollyana-ish, however, I don’t think you should feel discouraged. Granted, you’re probably going to have to make some significant lifestyle changes if you want to ramp up your retirement savings. But there are a number of ways you can put yourself in a much better position to retire than you are now—and certainly make yourself better off than had you done nothing at all.

Read the rest of the article at Real Deal Retirement

Thursday, May 26, 2016

How to Face the Challenges of Balanced Investing for Retirement

By Art Koff as seen in MarketWatch

The retirement challenge facing most Americans is how to achieve a balance between investments that are safe and secure while at the same time providing the growth and eventual income needed to adequately fund retirement expenses.
Of course there are many factors influencing investment decisions that need to be made which include overall health and life expectancy, the kind of lifestyle planned during retirement, the amount of capital already put aside and the actual ongoing performance of the investment portfolio.

Taking advantage of the long view

The basic strategy that is appropriate for most is investing in the stock market's continued long term increase in value. Most understand that the market is highly likely to increase over a 20-plus-year period of time.

To maximize an increase in funds over many years it is necessary to minimize the costs associated with investing and this means minimizing the fees, commissions and other costs of trading and funds management. The best way to achieve this is to invest in broad-based stock-index funds — either mutual funds or exchange-traded funds (ETFs). Not all index funds have the same fees, and over many years these fees can add up so it is important to carefully check these costs.

Where patience comes in

In addition a problem for many investors is that they react emotionally to the short term gyrations of the stock market. Historically, the "average investor" tends to panic and sell when markets fall, turning a temporary decline into a permanent loss of capital. Because there is a large financial press clamoring for attention, news about short-term declines is hard to avoid, and it's easy to act/sell on exaggerated fears. If it was as easy to track the daily value of your home and sell it when mortgage rates or unemployment jumped, many would have unfortunately sold at the bottom of the housing crash.

There will certainly be stock-market corrections (defined as a 10% or more fall in the overall stock market) and even bear markets (defined as a 20%-or-better drop) every few years, prior to and beyond your projected retirement date. Recent bear markets have resulted in 50% or larger declines, and weathering these bear markets takes a certain amount of fortitude, patience and understanding that selling at these times can be devastating to a nest egg. Since there have been 20 bear markets since 1929, or approximately one every four to five years, investors can expect several more prior to their date of retirement.

Balancing it all out

Some investors think they can avoid the anxieties and risks of investing in stocks by relying on the less-volatile asset categories of bonds and money-market funds; however, because these vehicles return so much less over the long term, an investor would need a huge portfolio to be sure her/his income would not run out or be inadequate for the full number of years of retirement.
A blend of stock funds, bond funds and cash would reduce the magnitude of swings in market value as compared to a 100% investment in stock funds. This would make it easier to tolerate down market times.

To achieve a balance between investments that are as safe as can be expected while at the same time provide returns that enable you to meet your financial needs, check your investment strategy using a retirement income calculator. This will help show you the tradeoffs that different combinations of stock and bonds your portfolio will produce. You may find you will need to adjust your planned expenditures during retirement, increase your pre-retirement savings, dial up the percentage of risk-based investments in your portfolio, or continue to work longer than you anticipated.

Here are links to some retirement income calculators:
  • CNN Calculator. Enter your age, retirement age and what you have saved so far and the calculator will project how much money you will have at 67 years of age.
  • Vanguard Retirement nest egg Calculator. How long will your retirement nest egg last? How much could your investments grow? Answer a few questions to see a long-term projection. Then try making a few changes to view the impact on your results.
  • T. Rowe Price Calculator. Share some information about your retirement needs and investments. This tool will run 1,000 market simulations to evaluate your chances of success and offer some tips to help improve your situation.
And here’s some Information on funding your retirement and retirement planning.

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

Visit the RetiredBrains Website

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