Retirement guide 2015

retirement Guide 2015

Why school is cool for retirees

money matters:

do you have enouGh?

the step-doWn retirement 4 tips to protect your home investment

no Work, all play?

how to do What you love every day

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4 Tips for a ‘Real’ Sound Investment Real estate is an enormous asset. Here’s what you need to know to keep your roof – or roofs over your head when you retire

By AlexAndRA GAlluccI |CTW FeaTures

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f you feel unprepared for retirement,chances are you’re not alone.

According to a 2014 survey by the Employee Benefit Research Institute,only 39 percent of retirees are very confident of having enough money to pay for basic expenses in retirement.

For many people,real estate is their biggest asset,and planning ahead in property matters can help eliminate your worries – and your debt – before you sail away from the workforce.

We talked with certified financial planners across the country for tips on managing real estate for retirement years.

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InveSTmenT PRoPeRTy

“With good tenants,a low [tax] basis in the property and a satisfactory location,a property owner can do well to keep the property,”says David Diesslin,chairman and CEO of Diesslin andAssociates Inc.in ForthWorth,Texas.

But maintaining properties as you age can be difficult and is a real concern for owners.Deferred maintenance can lower your return on investment,as can failure to raise rent prices,says Lauren Klein,a certified financial planner in Newport Beach,Calif.

To avoid this,Klein says rents should be raised every single year.

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PRoPeRTy TAxeS

“If a client is struggling to financially pay their taxes, chances are they have too big of a home,”says Rob O’Dell ofWheaton Wealth Partners,Wheaton,Ill.In this case,downsizing your home may be advisable.

Also,homeowners in Florida may now qualify for a homestead exemption by making a home their permanent residence.Owners can deduct up to $50,000 from their property taxes under this new rule.

In California,Proposition 13 limits property tax increases each year.

Homeowners over the age of 55 may transfer – once in a lifetime – the old property tax basis to a new

leyWealth Management says 85 percent of his clients inWichita, Kan.,prefer to be mortgage-free because they fail to see the bottom line:They may be better off financially if they don’t pay off the loan.

Klein often recommends that clients downsize their residence if paying off their home is a major concern.

Homeowners can benefit from refinancing at historically low rates instead of using assets to pay off their home.Plus,this often frees up cash flow that can be applied to other areas,such as retirement savings,O’Dell says.

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home of equal or lesser value.

In addition,there are exemptions for veterans,those with disabilities and people over 65 in many states that can help to reduce housing taxes.

Educating yourself on your state’s tax laws will allow you to capitalize on all your qualified exemptions.

Look to your local tax office for help in learning your state’s requirements to get correct valuations and exemptions,Diesslin says.

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PAyInG youR moRTGAGe

When it comes to financing your home,cash flow should be the goal,Klein says.For many people,that means not paying off the entire mortgage.

Don Grant,senior investment management specialist at Morgan Stan-

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GeTTInG A HeAd START

It’s tougher to finance property once you’ve retired,Grant says.If loan rates have improved, consider refinancing your house before you retire.Someone who is still in the workforce will show income that has the potential to increase,which will encourage lenders to give you the loan you need,Grant says.

Experts agree that it’s best to begin planning your real estate management before you buy.“With income real estate,rentals,et cetera,a disposition and debt plan should be established well before the closing on the property,”Grant says.“Go into the purchase with a good idea of what conditions need to be met to sell the property.” © cTW Features

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all about the benjamins

money is the top concern for recent retirees and those heading into retirement. having the right budget – and taking it for a spin – could help you figure out how much you need b y l or i c u l l e n | C T W F e a T u r e s

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etirement is what we work for.It’s the big payoff for working hard and living within our means,but it won’t be much of a joyride if you don’t have enough savings.Recent studies show most of us don’t.

Bankrate.com recently reported that 36 percent ofAmericans haven’t saved any money for retirement.

Another study,by the Employee Benefit Research Institute,reports that only 18 percent of workers feel very confident about having enough money for retirement,and 28 percent of retirees feel confident they will have a financially secure retirement.

Financial planning experts say it’s never too late to start saving and investing for retirement or working to improve your outlook.If you’re worried about your financial future,now is the time to think and plan ahead.

The financial planning industry abounds with recommendations for how much money it costs to finance a comfortable retirement:80 to 110 percent of the annual salary you made during your peak earning years;20 to 25 times your final salary for those who will rely solely on Social Security and personal savings.

These rules of thumb make general assumptions about post-work years, estimates that often aren’t much help for individuals.That’s exactly the reason Leonard F.Valletta,CFP,ofAlbany Financial Group inAlbany,N.Y., doesn’t like them.

“It’s not a simple answer,as much as we’d like it to be,”saysValletta.“It differs for everyone and comes down to what your expenses will be.”

Retirement planning is a balance between financial resources and lifestyle,he says.For some people retire-

ment dreams include having time to take long walks and live a simple lifestyle.Others might expand their lifestyle.

Valletta encourages all clients to enter retirement totally debt-free,if they can,but not everybody does.

In retirement,basic expenses can change.You may not need business clothing,or as much insurance,and if you no longer have children at home, expenses such as education might go away.But home maintenance and health care costs may increase,and you may pick up new expenses,like premiums for long-term-care insurance,he says.

To know how much you’ll need, add the cost of your desired retirement lifestyle to your expectations of basic living expenses.

If you want to determine if you can live on your projected budget,take it

for a test drive.If your anticipated retirement lifestyle included downsizing and you reduce your income, put the difference into savings,Valletta says.

While mostAmericans will receive Social Security benefits, these payments were never intended to support a comfortable lifestyle.The Center on Budget and Policy Priorities inWashington, D.C.,reports that for people who worked all of their adult lives at average earnings and retire at 65 in 2012,Social Security benefits replace about 41 percent of past earnings,far less than even the lowest replacement ratio suggested by financial planning experts.

One of the best planning strategies is to start now,saysValletta.

Most employers offer tax-advantaged workplace retirement plans, which can be powerful tools to build retirement savings,especially if they offer matching contributions.The amounts you’re allowed to contribute are significant,he says.

If you’re under 50,in 2012 the maximum contribution level is $17,000 and $17,500 in 2013.If you are turning 50 in 2013,you can contribute an additional $5,500 in catch-up contributions for a total of $23,000,and it’s all pre-tax.

Bill Losey,CFP,owner of Bill Losey Retirement Solutions in Saratoga,N.Y.,says the best advice to help people kick-start retirement savings is that the government and your company are not going to take care of you.Gone are the days of your parents’pension plans.Your financial well being is your responsibility.

Most financial planners say you need to save 10 to 20 percent of whatever you make.When consumers who don’t have great cash flow or have a lot of expenses hear those things,they just tune out and say I can’t save anything,Losey says.He combats this by offering his own 1 percent rule:Save 1 percent of your earnings each payday at a minimum.

“Let’s say you get a 3 percent increase at work;save 1 percent

and spend the other 2 percent,”he says.“That way,you’ll continually increase your savings rate,but you’ll also enjoy a higher standard of living.”

Losey’s second rule:Make savings automatic,a habit that will improve your chance of savings success.

With payroll deduction,saving is effortless.Pay yourself first — the most important rule of personal cash management.If you don’t have

a workplace plan,have money automatically paid from your checking account into an IRA. “If you automate the process and you get in the habit of saving money,all of a sudden you actually start to feel better about yourself, and you will see your net worth rising,”Losey says.“As your net worth rises,so do your self-worth and your confidence,and you end up making more and saving more.” © ctW features

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out of office, back to school classes and retirement communities geared toward second-act learning provide retirees all of the benefits of school ‌ no tests required by bev bennett CTW FeaTures

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henTed McIrvine, PhD.,wanted to learn more about Bell’s theorem, which he describes as a“remarkable advance in quantum mechanics”he taught a class.

But if you don’t care to hear about quantum correlations, McIrvine also teaches Henry James at the Movies,showing and discussing screen adaptations of some of James’best works.

Classes like these for mature adults bear little resemblance to what you experienced high school or college.Forget the tests.There are none.Don’t sweat rote memorization.It’s not required.

However,classes will help you expand your horizons,acquiring knowledge or refreshing your skills, and at the same time make new friends,which is often hard to do once you leave the workplace or your children are grown.

“When you retire you have to figure out who you are.You have to find substitute relationships for your colleagues,”says Nancy K. Schlossberg,author and professor emerita,University of Maryland.

Taking classes gives you the opportunity to be part of a community,according to Schlossberg in the Sarasota,Fla. Not only do you have a wealth of subjects to choose from,you can opt for studies at colleges and universities,retirement residences or nearby community centers.

These programs reflect an awareness that you benefit from continuing to learn throughout your life,whether you take programs for personal or professional reasons.

And,if you’d like to teach during your retirement years,applying your professional and personal interests as McIrvine does,you’ll be enthusiastically welcomed.

Both former college professors and subject enthusiasts are on the roster as volunteer instructors at the Osher Lifelong Learning Institute (OLLI) at the University of North Carolina,(UNC)Asheville, N.C.

Many instructors had teaching careers.Others never taught before but have a deep understanding and appreciation for a subject,such as the Beatles,that they want to share, according to Catherine Frank,executive director,OLLI. “These instructors have a passion,which is important,”says Frank,adding that passion is something that’s often not associated with aging.

McIrvine,who has a Ph.D.in theoretical physics,may be a perfect example.At OLLI he’s taught courses in forgotten composers,movies made from Henry James’writings as well as foundations of quantum mechanics.

Participants in McIrvine’s and other classes are just as enthusiastic.

Going to class now is so much different from when you were young.

For your first and second act you had to be good at everything and avoid things at which you weren’t good.The great freedom of retirement is trying new things you’ve never tried before,even if you’re not good,according to Frank.

Being with other participants who share your interests is part of what makes the experience comfortable.

“We encourage people to sit down and talk to the people next to them about the [class] content.I hear people say they’ve made some of the deepest friendships of their lives here,”Frank says.

Some retirement communities are offering learning programs as a central attraction,particularly in university towns.

The Forest at Duke is an example.

“If someone says let’s do an indepth study on what’s going on in the Middle East,I can go to my contacts and ask if someone at Duke can speak,”says IbbyWooten,director of activities and community relations for the not-for-profit continuing care retirement community near the Duke University campus, Durham,N.C. Residents want classes that are

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1/2 page ad informative and social but not“a true academic experience like when you were in college,”Wooten says.

There are no requirements for homework and no pressure to read the materials.

Some people follow everything; others don’t.

“It’s what you want to get out of it.We don’t try to make the decision for residents,”Wooten says.

If having programs atThe Forest at Duke isn’t enough,the retirement community partners with the Osher Lifelong Learning Institute at Duke (University).

With the two options available, newcomers have little trouble making friends,according toWooten.

Perhaps instead of a university setting you’re looking for something in your neighborhood.

Your path to new friendships and skills may be as close as your community center.

In NewYork City,where significant numbers of seniors live alone,

being able to connect with others through classes helps reduce depression,according to KarenTaylor,director for theWeinberg Center for Balanced Living,within the Manny Cantor Center,N.Y.C. “Being able to learn with contemporaries is beneficial,”she says.

The instructors and learners in theWeinberg programs are eager to participate and both benefit from the experience,Taylor says.

Take theWeinberg current events class conducted in Russian by a retired professor who acts as the facilitator.

“It’s an opportunity to honor someone’s lifelong profession and for a group of people to stay in touch with what’s going on,”she says.

There may be a perception that seniors are living in the past,but that’s not so.They want to be engaged in the world around them, according toTaylor. © ctW features

sign me up!: how to pick the right class With so many classes and so many styles of teaching, how can you choose the right one for you? try them out to see what appeals to you, says nancy K. schlossberg, author of “revitalizing retirement: reshaping your identity, relationships, and purpose (american psychological association, 2009).

What you take isn’t that important “as long as it’s something you like and it gives you social interaction that you need, that everyone needs,” says schlossberg. however, you may find some learning situations more appealing than others. do you want to listen to an instructor or participate as part of a group? do you want to sit in a lecture hall or join in a learning circle?

That’s a matter of individual preference. schlossberg says she “is lectured out. i need active learning. I don’t want to sit in on lectures.” if one of your goals is to develop friendships, schlossberg recommends a lifelong learning program in which you’re frequently with the same people. “i like that better than taking an individual coarse somewhere,” she says.

– B e v B en n e T T © ctW features

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ease into the Workfree life

more people are keeping their jobs as a part-time affair as they transition into retirement by marilyn Kennedy melia CTW FeaTures Baby Boomers are redefining what it means to“stop working�by shaping a new route to retirement

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– a ramp to take them there gradually.

While Boomers’parents and grandparents typically worked fulltime jobs before retiring,many workers 60 and over are now keeping one foot in the work world and gradually stepping into retirement.

A recent University of Michigan Retirement Research Center study found that 20 percent of workers aged 65 to 67 are“partially retired.”

The study defined partial retirement“as a job in which income doesn’t exceed 50 percent of the maximum annual earnings a person made in his lifetime.”

However,the study is inconclusive as to whether Boomers are choosing to take a half step out of the workplace,or have been kicked out of full-time jobs.

“It turns out that,comparatively speaking,the 63 to 67 age group leaves full-time employment in

much larger than normal numbers during recessions,”notes Dmitriy Stolyarov,UMRCC associate director.

Indeed,other research finds that in partial retirement,“people often move into less desirable jobs from a financial perspective,”notesTay McNamara,research associate at the Sloan Center onAging andWork at Boston College.

Still,it can be beneficial to tap the brakes on work and ease into retirement,notes Ithaca College professor Joel Savishinsky,author of “BreakingTheWatch:The Meaning of Retirement InAmerica.”(Cornell University Press,2000) “For some people,knowing that they don’t have to go from one extreme to the opposite extreme is a reassuring and comforting – and financially helpful – way to negotiate this major transition in life.” © ctW features

1/2 page ad extended hours According to a recent gallup poll, most Americans now plan on retiring at age 66, up from 60 in 1995.

“Whether it’s by need or by want, it’s more culturally acceptable to work longer,” says Tim Driver, CEO of RetirementJobs.com. “Ten years ago, it was more [rare] to see someone with gray hair sitting in a cubicle.”

The poll confirms the prevalence of gray in the workplace, with the average age of actual retirement moving up to 62, the highest since the survey questions started in 1991. Don’t think the delayed retirement trend results from experienced workers feeling valued by employers, however, Driver says. Many older workers, who tend to cost companies more than younger employees, have been laid-off. On the other hand, some businesses aim to hire older workers. One reason is because they tend to stay longer than younger employees, eliminating turnover expenses.

Banking and financial positions are particularly looking for older hires, he adds. One of the biggest demands for older workers comes from the old. “The classic example is somone in early to mid-stage Alzheimer’s,” Driver explains. “They are getting taxing for a family member to care for all day, so someone is often brought in four or five hours a day.

Someone older is often better at entertaining the elderly client.”

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research shows that retirees are eager to invest more time in hobbies, but how should

free time!

you choose a new interest? by bev bennett CTW FeaTures

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s retirement nears you’re eager to embrace that hobby you’ve been dreaming about.

Many people feel just as you do.

In a survey of adults 18-64, more than 85 percent expect to have more time for hobbies during retirement, according to a Pew Research Center report on Growing Old inAmerica:Expectations vs Reality.

But before you buy expensive gardening supplies or sign up for a pricy class making pasta in Perugia,retirement experts have two words for you:slow down.

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You don’t have to dive into your next passion immediately.

In fact,you’ll benefit if you take a pause first,according to Mickie Schroeder,co-owner and coach with her husband Jeffrey Jans,of Boomerangs,a non-financial retirement coaching service, Kansas City,Mo.,area.

Look inside yourself and figure out what it is you really want to do.

You’ll have the fun of trying out different interests without a big investment of time or equipment.

The faded coils of dyed reed that line the walls of my

garage are frequent reminders that I should have given more thought to what I wanted in a long-term hobby before buying a lot of supplies.

And if you determine that your fantasies don’t match the reality of your life,you will have learned something, such as my discovery that I actually don’t look forward to spending my retirement years weaving baskets to sell at art fairs.

It’s good to figure these things out because according to the Pew study, only 65 percent of those age 65 or older – about 20 percent less than the preretirement adults surveyed – actually have more time for hobbies.

Although you may hear that you should have planned your retirement hobby earlier in life,it’s also OK to still be searching.

“Some people know what they want to do.Some people are explorers,”says Nancy K.Schlossberg, author and professor emerita,University of Maryland.

“You can use this [early retirement years] as a period to explore.It puts

less pressure on you to find the right thing immediately,”says Schlossberg, Sarasota,Fla.,area.

However,doing a few exercises may help you sort through the possibilities.

Ask yourself what’s interesting or what’s appealing to you.

“At a gut-level what did you always want to do,but give up [because of other obligations]?”Jans asks.

Make note of this.

In addition,the retirement coaches suggest creating a checklist of activities you’ve tried and liked.That provides you with more clues of what to pursue.

You may discover that you’re drawn to crafts or high-intensity sports activities.

Next figure out what aspect of these activities appeals to you.

For example,you may love gardens.

You even travel long distances to see notable ones.But you also realize you have no interest in pulling weeds.

That doesn’t mean you should scratch gardens off your list.Instead

look other ways to get involved.

Rather than digging up dirt in the backyard,you may want to be a tour

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guide at a botanical garden. © ctW features

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6 Questions to ask When considering community living by yena lee CTW FeaTures

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here’s no single catalyst for seniors or caregivers to seek out a full-time care facility for themselves or a loved one.However,people usually wait until someone is sick,hurt,has surgery,develops chronic care needs or disabilities that require ongoing nursing care.

Although it’s often seen as a negative when someone requires a little assistance to live,it doesn’t mean you have to give up who you are,

especially these days.Today’s senior living communities cater to a broad range of life stages for retirees,from housekeeping and companionship to medical assistance for a disability or chronic condition depending on a person’s degree of needs for health care and resources.

Home care is a private assisted care service that remains a popular choice for the people who need health care outside of medical facility.Home caregivers work closely

with patients and families to provide the ideal level of care for a person’s specific and unique needs.It offers flexible solutions,so everyone can enjoy the sense of independence and familiarity of their own home.

For healthy,active seniors who desire the convenience of community living while remaining close to friends and family,independent living communities are an ideal option.They generally feature apartments or condominiums for seniors who don’t require special care.Benefits can include transportation,meals,housekeeping and more,while providing a lifestyle filled with social activities among other seniors.

Assisted living facilities provide supportive housing and care to seniors who need some assistance with daily tasks,but who do not require the high level of care provided in a nursing home.It commonly includes assistance with bathing,eating and mobility,social and recreational activities,medication management and meal service.For those in need of skilled nursing care and 24-hour assistance,a nursing home will be best option.

Once you decide the option that’s best,the next step is to find a place that is a good fit.Here,James Ellor,professor in Baylor University’s School of SocialWork and gerontology expert suggests six questions that will guide you to make a the decision that’s right for you and your family.

1) What is the turnover rate for the staff?

A facility with high turnover rates is more likely to have difficulty providing consistently good care,according to theAdvancing Excellence inAmerica’s Nursing Homes,a coalition of 28 organizations representing groups ranging from nursing home providers to quality improvement experts to government agencies.

How long have most of the staffs worked there?Are there enough licensed staff members to provide supervision and assistance?Ask about the qualifications of the staff.

2) doeS THe PATIenT’S docToR

serve the facility?

Even if you have a personal doctor, ask about how often your physician is allowed or scheduled to visit,and inquire about the on-site doctor.It’s important to get preventive care,like a yearly flu shot,to help you stay healthy,and also to have special care of in case of emergencies.“When you’re under the care of your physician,you’re going to get better treatment,”Ellor says.“Also,you need to assess the reputation of the medical director.

3) What is the status of the FAcIlITy’S RecReATIon And social services?

The social activities are an important factor to keep residents engaged and entertained,which provides mental health benefits including delay of cognitive decline.Some places help visitors experience what the facility offers organizing events.Look for recreation and therapy equipment such as games,craft supplies and books.An ample amount of equipment and programming can prove a thriving rehabilitation and recreation program, Ellor says.

4) What is the reputation of the staff?

Do your homework by checking up on the facility’s record with your state’s long-term care ombudsman to ask about resident or family complaints.“It can often tell you whether a facility has had a number of problems,”Ellor says.“The state board of public health can tell you if the place has received any citations.”

5) is the facility accredited?

Find out if a facility is accredited.It is not always a deal breaker,but accreditation shows that the facility complies with all of the safety and medical guidelines ofThe Joint Commission,formerly known as the Joint Commission onAccreditation of Hospitals (JCOAH),Ellor says.“This is strictly voluntary on the part of the facility,but it shows that they’ve taken extra steps,”adds he.

6) hoW is the environment?

Take a look at the faces and body language of the resident’s, as well as the general atmosphere of the place at your visit. How clean are the hallways? Are the residents dressed

appropriately? Do residents and visitors seem to enjoy the meals? © ctW features