Tag: retirement

retirement

Retirement is the process of hanging up your boots and predominantly ending your employment tenure. Many people retire when they fail to find the energy and the enthusiasm to work anymore.

3 Worst States for Taxes Everyone Should Know Before Retirement

When a person nears retirement, he or she often starts hunting up the best places to retire. The most common criterion for choosing a place is the tax laws of the state. If the taxes are more, a person usually avoids that state and seeks a place where the taxes are lower. Kiplinger recently prepared a list of top 50 places to retire in the U.S. Here the worst three states are mentioned.

TaxesWhere not to live after Retirement?

The study done by Kiplinger recently has created a list of all the 50 states in order of their preference that would be preferred by a retiree. The tax laws of all the states played a key role in assigning them a position in the list. States that have lower taxes gained a better position and states that have higher taxes were low on the list. The worst states for retirement are New York, New Jersey, and California. Another key factor that was used rank states are the health care facilities. Some other factors like the cost of living were also used.

The Last Option

The worst state to retire according to the Kiplinger list is New York as the living expenses are 29 percent above the national average. A sad fact is that the state is so expensive, the percentage of residents over the age of 65 and living in poverty is above average.

The Second Last Option

The runner-up is the state of New Jersey where the tax policies are tough on the retirees. The state sales tax is 7 percent and the local property taxes are also too high. When one combines the local tax and state tax burden, the result is second highest in the country.

The Third Last Option

The 3rd worst state for retirement is California. The state has expensive housing and the taxes are enough to put a dent in the retirement nest egg of a person. Most parts of the retirement income of a person are taxable. The income tax rates of the state are highest in the country.

Conclusion

It seems that the people who are nearing retirement would be smart to stay away from these three places when they are looking for a new home and new beginnings. After all, what’s the benefit of moving into a new place when one has to pay so many taxes?

Wyoming May Offer Early Retirement to State and UW Employees

A report says that Wyoming may offer early retirement to state and UW employees. This step would be taken to save money in the face of a huge budget shortfall. The step of early retirement will only be feasible if the lawmakers get a bill passed. The employee group of the state has not taken a stand in this regard yet. Though early retirement would be more costly to the state initially, it will save money in the long run.

Retirement Benefits

Bill Verifies the News that Wyoming May Offer Early Retirement to State and UW Employees

Wyoming may offer early retirement to state and UW employees. This speculation was confirmed with the proposal of a bill, Senate File 95 that is sponsored by ten lawyers is passed. This bill was introduced as the result of the efforts of the state leaders to save money. The state is already facing a huge budget shortfall.

The Eligible People

If the report that says Wyoming may offer early retirement to state and UW employees turns to be a fact, about 2,000 employees would qualify for an early retirement as per SF 95. The qualified workers are calculated on the basis of a formula that considers their years of service and age, says the primary sponsor of the legislation, Sen. Curt Meier, R-LaGrange. It is pertinent to add here that in total about 8,000 people work for the State of Wyoming and 3,000 employees work at the University of Wyoming.

The Shortfall

Wyoming may offer early retirement to state and UW employees because the lawmakers are struggling with a shortfall of about $400 million in the current budget cycle of two years and $3 billion. It is despite the fact that the Gov. Matt initiated $250 million cuts last summer which leave the Wyoming Legislature with about $150 million to use savings to fill or cut.

The Reductions

Wyoming may offer early retirement to state and UW employees because the lawmakers don’t wish to offer pink slips to the employees. Meier stated that he doesn’t want to give pink slips to people and if reductions are needed the executive branch should have some options.

The Plan

Wyoming may offer early retirement to state and UW employees if SF 95 becomes a law. If it becomes a law, it will come into effect on an immediate basis. After that, the employees could notify the Wyoming Retirement System and their employers and leave a job as soon as April 1, 2017. They can retire through June 30, 2019.

Long Term Savings

Offering early retirement to state and UW employees may cost some upfront money to the state but the amount of money the state would save over the long term is more, says Meier. The state would need to pay sick time and unused vacation time to the employees. The employees who are aged 61 or older would be given a bonus of three months as their salaries and the state would make the monthly payments of about 20 percent of the salary of the employee until the employee reached 62 years of age. The latter would be done for a few UW or state employees only. The state would also be responsible for making monthly health insurance payments until a retiree turns 65 years of age.

The Liabilities

In the fiscal that commences on June 1, 2017, the state would have to pay out an estimated $41 million to the retirees. It will have to pay about $34.4 million over the next two years. But since the number of salaries that need to be paid will be lesser, the nonpartisan legislative staff has around $56 million in savings for the year that begins on June 1, 2017. Around $108 million will be saved over the next two years.

The Filing of the Bill

SF-95, the bill that gave birth to the speculation that Wyoming may offer early retirement to state and UW employees was filed and made public a few days back.

No Reaction Yet

Interestingly, The Wyoming Public Employees Association, a group representing the state employees has not taken a stand on the new legislation that raised the speculations that Wyoming may offer early retirement to state and UW employees. The Executive Director of The Wyoming Public Employees Association, Betty Jo Beardsley stated that the group has yet to decide a position on this legislation.

Early Retirement for University of Wyoming Employees

Chris Boswell who serves as the Vice President of the University of Wyoming stated that the school is currently putting together an early retirement program for the faculty that will most probably be launched in this spring. This step is taken in order to save some money. He also mentioned that the University would be interested to see how this bill might merge with the existing early separation incentives of UW that are underway at the moment.

The Biggest Side Effect of the Bill

Meier says that the biggest side effect of the fact that Wyoming may offer early retirement to state and UW employees is that the state and University will have to face a brain drain as some of the skilled employees might leave and never come back.

Are Women Better at Post-Divorce Financial Planning Than Men?

When a couple is in love and living a blissful life, they don’t often pay attention to post-divorce financial planning or estate planning together. Many couples think that talking about finances and the stake of each of them in the joint finances or estate is unromantic and they don’t discuss it much. This approach is not correct. Every couple must ensure that they have their finances in the right order and both have knowledge of family finances in case their marriage falls apart in the future.

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Survey on Post-Divorce Financial Planning

New Personal Financial Planning (PFP) Trends Survey of CPA financial planners conducted by the AICPA has recently highlighted that 75.6 percent or three in four retirement age divorcees need to develop a better understanding of how to manage their personal finances. The people who are wondering why good financial planning education is needed for people nearing retirement should note that the divorce rate for Americans who have crossed the age mark of 50 has doubled since the year 1990.

Divorce Deteriorates Spending Habits of Older Couples

The survey has also unveiled the fact that when an elderly couple go through a divorce, 25.7 percent of women and 24.9 percent of men go through a stage where their spending habits deteriorate. This is the only common thing between the sexes because there is a huge difference in how men and women approach their finances when they are preparing for retirement or handling their finances post-divorce.

CPA Financial Planners say Women Adopt Positive Financial Behavior Post Divorce

Several CPA financial planners have stated that women are more likely to adopt positive financial behaviors post-divorce as compared to the male clients. Around 40. 2 percent women even sought a job while just 20.6 percent men did the same.

Women Stress on Increasing Retirement Savings Post Divorce

About 41.3 percent of women worked towards increasing the retirement savings post a divorce while only 16.4 percent of men made the retirement secure. Around 42.3 percent women improved their spending habits as compared to 11.7 percent of men. Women were also seen seeking financial advice post a divorce. Around 60.4 percent women went for it while just 4.4 percent men did the same.

Expert Opinion

Tracy Stewart, CPA/PFS who serves as the member of the AICPA’s Personal Financial Planning Executive Committee has stated that when couples get divorced later in life, they realize that there was only one partner who kept a hold on all finances and did all the bad or good financial planning. In the Boomer age couples, the responsibility is handled by males.

Such a scenario leads to one person having exact information on everything related to the finances, including the retirement savings while the other has bare minimum information.  Stewart says that it is vital for couples who get divorced later in life to take a long view when making financial decisions and dividing the assets.

Points to Remember

In the survey, the financial planners were asked what steps the couples nearing retirement should take so that they can be financially secure post a divorce and have a steady retirement income. About 75.6 percent of the financial planners advised that people should understand how to manage their personal finances. About 73 percent urged that each couple should understand the long-term consequences of any divorce settlement while 56.9 stressed on understanding the tax implications of any divorce settlement.

Key Elements of a Financial Plan

Stewart says that when happily married couples make a financial decision, they rarely consider what will happen to their good financial planning efforts of the present in case they went for a divorce in the future. The sad truth is that the process of dividing assets is very complex as compared to saving or investing. The good thing is that CPS planners have a strong understanding of tax planning and they can often ensure that the divorce is settled in a tax-efficient manner.

Stewart also stated that divorce is a complex financial event that often involves calculating child support or spousal support, understanding pensions & investments and deciding what to do with the house a couple shared. In order to do good financial planning, both parties should understand what they have.

More Advice

Approximately 51.2 percent of CPA financial planners think that people should regularly update their wills or trusts if they want to do financially well post a divorce. Around 50.7 percent CPA planners think that increasing saving for retirement is crucial while 42.8 percent thought that decreasing the spending is vital. About 36.1 percent also cited that establishing a pre-nuptial agreement is a good step in preparing the clients financially for a divorce.

Open Communication on Finances

Stewart also suggests that couples should hold open and regular communications about good financial planning, estate planning, retirement savings and all other aspects of their financial life so that they can get on the same page about their approach to spending and saving.

Americans Don’t Plan On Retiring Until They Are 70: Survey

A recent survey has shown that many Americans don’t plan on retiring until they are 70 years of age. The survey also found out that people who expected to work until 70 would likely be more stressed and unhealthy as compared to those who plan to retire at 65. The survey stated that Americans were also of the opinion that their generation is worse off financially than their parents’ generation.

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50 Percent of Private Sector Employees Don’t Plan on Retiring Until 70

As per the Willis Towers Watson survey, about 23 percent of Americans are planning to continue to work into their 70’s. This percentage was just 16 percent in 2009. The human resource consulting firms’ survey also stated that though almost all average employees wanted to retire at 65, about 50 percent of them would still be working until 70.

Stress in Jobs

The survey also exposed the fact that most of the employees who planned to work past 65 years of age were stressed about the job, less healthy as a person and they even felt more struck in the jobs as compared to the ones retiring at 65. The survey included opinions of more than 5,100 U. S. workers. It also included the opinion of about 30,000 working professionals who resided in 19 nations.

The Hidden Pensioners               

The term used for people who are planning to retire beyond the retirement age due to any reason is hidden pensioners.

Employees Feeling Stuck at Jobs

The survey has pointed out that about 40 percent of people who plan to retire after 70 feel that they are stuck in their jobs. This percentage is 28 percent in people who plan to retire at 65 or even before that. These details were shared by Steve Nyce who works as a senior economist at Willis Towers Watson.

The Pessimism

The pessimistic nature of U.S. employees was also revealed. The survey stated that about 76 percent of Americans think that their generation will be much worse off in retirement when compared to their parents’ generation. This percentage was considerably lower among the global respondents. It was just 66 percent. Nyce confessed that the developed economies such as Japan, U.K, and U.Ss are less optimistic about next generation. This may be the reason why most professionals who are doing a job right now don’t plan retirement before they reach the age of 70.

Federal Employees Plan on Retiring Earlier

As a result of Federal Employees having access to retirement benefits like the FERS Annuity, the Thrift Savings Plan and FEHB, most Federal Employees are likely to retire earlier than their private sector counterparts.  These advantages illuminate the realities and the differences between the benefits available in the private market compared to the benefits afforded to federal employees and their families.

Police Retirement Accounts Underfunded in Davenport County, Iowa

The police retirement accounts remained underfunded in the Davenport County, Iowa for a few months due to an error. The problem has been rectified after the union members asked it to be fixed. Compensation has also been made to all the officials who were impacted. There is no impact on the budget.

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The Mistake regarding Retirement Accounts

On July 1, 2015, the employer contribution to all the union members’ retirement health savings plan was to be increased from 2 percent to 3 percent of individual income but it remained 2 percent only for 29 pay periods which made the Davenport Police Department’s union members a  little light in the retirement wallet. The increase was to happen due to the current police union contract.

But due to a mistake made by the city’s payroll department, the increase did not happen on time. An officer discovered this mistake and reported it to the concerned department.

The Error

As per the statement of Brandon Wright, the Finance Director the error occurred because the payroll system of the city was not adjusted at the beginning of the year.  As a result, it did not reflect any change. It was corrected soon after the error was pointed out.

The Compensation

Dawn Sherman who serves as the Human Resources Director stated that as the contract was negotiated in good faith, the difference was offered as compensation from the city but the union demanded to get an interest too.

Wright stated that the city agreed to it and made a contribution for the interest too. It used the annualized rate for NASDAQ and Dow Jones to calculate the interest. The total amount of the interest was $5,234.96 which is about $32 per person.

No Impact

Even though the $120,000 in missing contributions went unnoticed last year, they will have no impact on the last year’s budget. Wright said that there was no impact on the budget because the amount was rightly budgeted.

Not a Big Deal

Sgt. Eric Turner did not think much of the city’s mistake of keeping the police retirement accounts underfunded because the problem was resolved quickly and satisfactorily. He stated that someone misread the contract but it has been taken care of. He added that it was a small mistake that was corrected immediately. It seems that he is downplaying the error which has impacted the life of numerous police officials of the county.

Marquette County Retirees Need to pay for their Health Care Costs

As per a new rule, the Marquette County retirees need to pay for their health care costs from the next year. This change was agreed upon in 2015. The reason for the change is constantly rising health care costs and increased liabilities of the county. In 2017 budget, the money set aside for health care has also been increased.

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From when will the Marquette County Retirees Need to pay for their Health Care Costs?

The Marquette County retirees need to pay for their health care costs from January 1, 2017. It applies to all the retirees who are under 65 years of age and opting for retirement after the said date. They will need to pay 75 percent of what a working employee pays. This Announcement was made by Scott Erbisch who serves as County Administrator. It was also highlighted that the said retirees would also need to pay a co-share towards their own Medicare Advantage policy.

Previous Scenario

Until January 1, 2017, the health care for retirees who were below the age of 65 was totally funded by the county and it had supplemental policies for people who were over 65 years of age.

The Current Retirees

The retirees who opted for retirement before January 1, 2017, and are also below 65 years of age will not be affected. Retirees who are over 65 years of age will also continue to receive both, a supplemental policy and Medicare.

Vital Change

The decision that says Marquette County retirees need to pay for their health care costs was made when six out of eight bargaining units agreed to the change during negotiations that were held in 2015.  This change was necessary as the health care costs are rising at a rapid pace and the unfunded medical liability of the county is increasing.

The Past, the Present, and the Future

While talking about the need to implement the change in which Marquette County retirees need to pay for their health care costs, Gerald Corkin who serves as Marquette County Board Chairman stated that health care costs have increased by 70 percent during one three-year period in the past 5 years. He also mentioned that health care coverage takes $4 million from a $26 million budget. So it’s a big item on the budget. It was also highlighted that the county has reserved 2.4 million for retiree health insurance in 2017 which is a 10 percent increase over the expense that was projected for 2016.

Many Women Fear Running Out of Money in Retirement

It is a known fact that the position of American women in the workforce has improved a lot in the last few years. They are also earning a higher number of college and graduate degrees as compared to men. The number of women business owners is also growing as more than 36 percent of American businesses are now owned by women. Yet, many women fear running out of money in retirement.

post-Retirement

Research Claims Women Fear Running Out of Money in Retirement

A recent research conducted by Merrill Edge, the online discount brokerage service offered by Bank of America Merrill Lynch said that 59 percent of mass affluent women have a concern that they would run out of money in retirement. It also said that both men and women fear running out of money in retirement but this insecurity may be compounded for women because they have some additional challenges.

The Challenges

The additional challenges women have to face are longer life spans, varied earnings patterns, and unique careers. It is a fact that women live 5 years longer than men so they must expect to spend more in retirement. They must also remember that the retirement savings of a couple may be diminished due to the costs related to caring for a partner.

Another fact is that most women spend about 7 years out of the workforce to try alternating career paths and caring for a family member like children or elderly people. This reduces the number of total working years of women as compared to men. A thing every woman with fewer working years must understand is that if a person doesn’t have at least 35 years in the workforce, the Social Security Administration would add zero-earnings years to their record to equal 35 years which may lessen the amount of earnings and benefits considerably.

The Solution

The only solution to the problem that women fear running out of money in retirement is that they should start saving and investing as much money as they can. It would help them a lot in their golden years. The relationship status of the women should not matter when it comes to retirement savings. Whether a woman is single or has a family, she must try to save and invest a lot of money for a better future rather than depending on someone else (even their life partner) for money in the golden years.

Half of American Population Opts for Retirement by 63: Survey

Retirement is not an easy choice for people. Some people prefer to work as long as they can to keep their finances in a good position while others prefer to retire early even when it means losing out on some benefits. A personal finance technology company, SmartAsset recently tried to decipher how the average retirement age is varying across America and revealed some interesting fact about retirement in America.

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The Method of Retirement Study

SmartAsset tried to find the average retirement age in every state by using the microdata on labor force participation. This data was made available by the U.S. Census Bureau. The organization focused on the labor force participation rates for people who were between the ages of 40 and 80 years.

It is vital to mention here that the labor force participation rate shows the percentage of people who are unemployed or employed. During the analysis, SmartAsset controlled for the percentage of people who were not a part of the labor force.

Similar Results

In this years’ survey, SmartAsset found that the national retirement age in the US hasn’t changed much as compared to the survey results of the year 2015. By the time people reach the age of 63, nearly half of them had opted for retirement. It was the same in 2015.

The survey also exposed the fact that the youngest age for retirement across all the US states was 62 while 65 was found to be the oldest average retirement age. This was also the same in the last years’ survey.

Late Retirement

The results of the survey also highlighted that retirement comes late in New England as four states in this region have the oldest average retirement age, i.e., 65. It was also mentioned that the average resident in New Jersey retires at 65 too.

Fewer Late Retirees

The useful survey also found that people in America don’t like to go on working after they hit the 80 years mark. Only 6 percent of Americans didn’t take retirement after they hit the age of 80 while a vast majority of them were retired. This percentage has also not changed since last year.

The Upcoming Change

Experts believe that the number of people who did not opt for retirement in their 80s is bound to increase in the next few years. It has also been predicted that the average retirement age would also increase.

Women more Likely to Suffer from Poverty than Men in Retirement

Women are more likely to suffer from poverty after retirement than men. This is a harsh fact and the main reason behind it is the pay gap between men and women. Many women are living from paycheck to paycheck and they fear what will happen to them after retirement. Experts believe that women should be given equal wages like men so that they could also save towards retirement.

Retirement BenefitsWhy are Women not saving for Retirement?

Many women don’t work at all or work part time because they have responsibilities of managing a home, raising kids and caring for the elderly. Another reason is that women often spend their money on home needs or the needs of children and elderly rather than saving it towards their own retirement funds.

The Danger of Poverty

A nonprofit research center, The National Institute on Retirement Security reports that women are 80% more likely to be near poverty in their golden years as compared to men. The report also states that women who are between the ages of 75 to 79 are the most likely victims of poverty.

The Reasons

The core reasons why women have to deal with retirement insecurity are the pay gap, single parenthood, divorce and a comparatively longer lifespan than men. A woman named Marsha Hall recently shared her reasons for having no retirement savings. She had saved up in a 401(k) plan but then she lost her job and lived off those funds until she got a new job. Now, the divorcee is living from paycheck to paycheck and doesn’t even think about what her situation will be after she retires. The situation is so bad that Hall is making use of Section 8, a housing subsidy and if she didn’t have that, she has no idea where she would be living.

The Solution

The Vice President for family economic security at the National Women’s Law Center, Joan Entmacher opines that the solution to the lack of retirement funds of women begins when the earnings and wage gap reduces.

This gap was consistently narrowing from the 1970s and the 1990s but this gap stopped reducing in 2001. Now, women earn just 76 cents on a dollar while men earn 79 cents on a dollar. This situation needs to be rectified and there should be no gap if women are to really have a better life after retirement.

More Americans are Taking Student Loans Closer to Retirement

A study has revealed that more Americans are taking student loans closer to retirement in order to ensure that their children get the proper education. Paying off the debt usually has an impact on their retirement benefits savings. Experts say that Americans are taking the loans so close to retirement despite knowing the consequences because they want their kids to fare well in the job market that’s become very degree-oriented.

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Study Says More Americans are Taking Student Loans Closer to Retirement

The study which sheds the light on the fact that more Americans are taking student loans closer to retirement was conducted by the University of South Carolina. It says that many Americans with college-age children have taken the student loans so that they can help their children to pay up the tuition bills. It has become a common practice which suggests that a higher number of workers are taking student loans closer to the retirement.

Exact Figures

The study that mentions more Americans are taking student loans closer to retirement says that more than one in eight parents or 12.7 percent of the respondents have taken students loans to support their children’s education. Those who were on the hook had average balances of around $21,000.

New Questions

The USC researcher, Katrina Walsemann who wrote the study with Jennifer Ailshire says that the research raises a new slate of questions regarding the effects of taking debts to pay for a kids’ education and how taking loans so close to retirement would impact the Americans later in life.

Walsemann also said that whatever impact the student loans have on the life of the older Americans, it is very likely that the loans will keep on growing. She says that the education debt is soaring these days as more Americans now go to the college. The major reason behind getting so educated is that the job market now demands a degree. She also added that the baby boomers she had studied may just be the first wave.

Double Loans

Walsemann also highlighted that the though more Americans are taking student loans closer to retirement, they are probably not doing it for the first time as most of them maybe took the student loans for themselves in the first place. She also says that these parents should be saving more towards their own retirement benefits savings now.

The Publication

The study that reveals more Americans are taking student loans closer to retirement was published in the Journals of Gerontology last month. It sheds the light on the fact that a growing share of education debt belongs to older Americans.

Not the First Study

It is pertinent to add here that the fact that the more Americans are taking student loans closer to retirement is not highlighted for the first time. It was earlier highlighted by the report offered by the Federal Reserve Bank of New York. It stated that people over the age of 50 were responsible for about $216 billion student debt in 2015. Interestingly, this number has grown six fold since the year 2004. The same report says that Americans under the age of 50 had over $1 trillion of student loans in 2015.

Expert Speak

A Dartmouth College professor, Jason Houle, who studies student loans, thinks that people often don’t think about their parents. Parents often leverage themselves for their kids so that the children can go to a college. They mostly do it because they don’t have many other options. Parents are aware of the fact that if their kids don’t get a college degree, they will not fare well in the labor market.

The Future Plans

After completing the study that says more Americans are taking student loans closer to retirement, Walsemann now plans to start probing how the parents fare after sharing the load of a student debt. She also thinks that the debt may keep the parents in the workforce for a long period of time as it might have a bad impact on their retirement finances. One vital concern is that social security payments can be garnished in order to pay the student debts.

A Sad Fact

It seems that Walsemann’s idea of studying how student loans impact the retirement is a good one when one considers the fact that about 30,000 people getting social security checks had their payments offset due to a federal student loan. This incident occurred in 2014 and the data was revealed by the Government Accountability Office.

Conclusion

It is clear that the fact more Americans are taking student loans closer to retirement is not a good one for their own retirement benefits savings. The older Americans would be smart to remember that they should not bite more than they can chew and ruin their golden years to educate the children.

Women Retirement Age is Increasing with Time: Research

Women are working way past the ages when their mothers and grandmothers have retired in the earlier time. The reasons for the long working life and postponed retirement may vary from loving their jobs to being more educated. A research tried to find out all the reasons and highlighted what impact having children has on women retirement age.

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Proof of Increased Women Retirement Age

A research conducted by two economic professors of the Harvard University states that almost half of the women working in their late sixties are in year-round and full-time jobs. This number is up from 30 percent, about 20 years ago which clearly shows that more women are working past the retirement age than ever before. The professors who conducted the research were Lawrence Katz and Claudia Goldin.

Education and Retirement

The research also found a relationship between education and retirement. It states that women who have got a college degree are more likely to work in their late sixties and early seventies than the less-educated ones. The report also highlighted that the number of college graduates is on the rise in the nation which means that the number of late working women is also on the rise.

Past Work History

According to the research, past work history also matters a lot. The women who began working in the 1970s and 1980s have the connections, job skills as well as the careers they can continue to pursue.

Loving the Job

Goldin and Katz analyzed the survey data that was linked to Social Security earnings records and found out that the women postpone retirement only when they love their jobs.  If a woman loves her job and it’s a vital part of her identity, she would be happy to work past the retirement age.

Children and Retirement

The survey also revealed that children are not a big factor with regard to increased women retirement age. Women may feel it’s hard to stay in the workforce when they are between the ages of 25 to 44 because the parental leave of more than 12 weeks isn’t mandated, but children don’t impact the work life of women after they hit 65 years of age. The survey also found that though women who had kids earned less than women who don’t, the women who had kids love to restart their career when the kids are old enough to take care of themselves.

Best Places for Retirement in 2017

A report by International living has highlighted the best places for retirement on 2017. They all have been decided by keeping in mind the cost of living and various other factors. Though the list comprises on 24 amazing places, here is the list of the top 10 destinations that would make the golden years more glorious and comfortable.

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List of Best Places for Retirement in 2017

The list of best places for retirement in 2017 was created by International Living, an organization which has been doing it for more than 25 years. It has changed its parameters constantly and added new categories as well as considerations. It has also gathered new data by asking better and more questions from a better number of expats. Some countries were also added to the list when they had the limelight like Malaysia was added in 2000 while Colombia was added in 2007.

This year too, all the best places for retirement in 2017 were decided after putting them under the microscope and examining them. The locations are ranked by highlighting the destinations where the value of a dollar goes further, where one can get the best bang for the buck in terms of real estate, quality of life and cost of living. The quality of infrastructure and healthcare were also analyzed. The English proficiency of the local people, the size of expat communities that exist and the level of a healthy lifestyle were also judged.

A Worthy Winner

Mexico has topped the list of best places for retirement in 2017 as it has been constant. For the last 14 years, it has constantly ranked in the top 10 retirement destinations available on the planet. It has taken the top spot fifth time in the Annual Global Retirement Index.

Other Winners

Standing at number two is Panama which is followed by Ecuador at number 3. The fourth position is bagged by Costa Rica which is followed by Colombia, Malaysia, and Spain. Nicaragua, Portugal, and Malta have the 8th, 9th and 10th positions respectively.

Conclusion

It can be seen that there are multiple best places for retirement in 2017 that are all affordable and enjoyable at the same time. A person should choose a destination on the basis of his or her own needs, preferences and the budget. Also, this decision should never be rushed as a person’s future life depends on it.

Moving Preferences of American Retirees

The expectations of seniors change after retirement and this fact was highlighted by a recent study that lists the moving preferences of American retirees. More and more of them are heading towards the mountains rather than the sea. Experts say that the seniors are relocating at such a fast pace that even the relocating of Millennials to the urban areas is overshadowed.

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Study Shows Moving Preferences of American Retirees

The study that has uncovered the moving preferences of American Retirees was entitled as the 40th annual National Movers Study. It was conducted by United Van Lines, a moving and relocation Company based in America. The study tracked the inbound as well as outbound moves by the state since the year 1977. It included all the moves it handled within the District of Columbia and 48 contiguous states.

Untrue Prediction

Not long ago, it was being predicted that people heading towards retirement would choose to live near the seaside and to the places that had mild climates. This study found that many were seeking other destinations like Pacific West and Mountain.

New Retirement Hubs

Commenting on the results of the study that mentions the moving preferences of American retirees, Michael A. Stoll, an economist and a professor in the Department of Public Policy at the University of California, Los Angeles stated that the data clearly reflects the location preferences of retirees.

He added that as more and more people are deciding to relocate post-retirement, new retirement hubs are coming up in southern and western states. He also mentioned that the people who have retired are relocating at such a fast pace that they are overshadowing the movement of Millennials to urban areas like the Midwest and Northeast.

The Factors

While talking about the moving preferences of American retirees, it should be mentioned that they consider several factors before the move. These factors include but are not limited to availability of good medical care, the tax patterns, the cost of living and proximity to family. The last one is a strong consideration for many as about 20 percent of all those who moved took the step in order to be closer to their family.

Here is the list of top 10 destinations that are the key moving preferences of American retirees.

  1. Wyoming

The study that lists the moving preferences of American retirees puts Wyoming at the 10th position because of all the movers entering the state 21.05 percent wanted to retire here.

  1. New Hampshire

It is one of the most unexpected places one expects the retirees to spend their golden years due to its weather but still about 23.08 percent people who moved to this state wanted to retire here.

  1. Maine

The New England climate of the state didn’t terrify many people as 24.72 percent of the people moved into this state last year. About 31.71 percent of those people were between the ages of 55–64 and about 35.37 percent were either 65 or older than that.

  1. Montana

About 24.75 percent of people relocating here had retirement in mind but unfortunately, the state lost more residents it gained as 49 percent were coming in while 51 percent were relocating out.

  1. Idaho

This is a prominent state among moving preferences of American retirees as 25 percent of the people who moved to this state were seeking retirement.  Of all the people coming to live in the state, about 34.52 percent were between the ages of 55 to 64 while 27.4 percent were at least 65 years of age or older than that.

  1. New Mexico

About 27.13 percent of the people relocating to the state were after a happy retirement here. About 34.17 percent of the new residents of the state were between the ages of 55 to 64 while around 33.33 percent were either 65 or older.

  1. Arizona

Arizona has been among the moving preferences of American retirees since a long time now. And it hasn’t lost its appeal as 30.75 percent of the people relocating to the state were foreseeing retirement here. Additionally, about 28.7 percent of the new residents of the place were between 55 to 64 years of age and 31.5 percent were at least 65 years or age or more than that.

  1. South Carolina

About 60 percent of the people relocating here admitted that jobs, health, and retirement were the top agendas for them. The would-be retirees consisted of 32.35 percent of the total new residents.

  1. Nevada

This place performed way better than expectations while considering the moving preferences of American retirees as it succeeded in beating a hot favorite, Arizona. About 58 percent new residents entered the state and around 32.43 percent admitted that they were seeking retirement. Coming to the age factor, about 34.58 percent were between the ages of 55 to 64 while those with 65 years or age or older consisted of 28.5 percent of the new residents.

  1. Florida

This state is the clear winner while looking at the moving preferences of American retirees as about 57 percent of the total moves here were incoming and 28.98 percent of the total were between the ages of 55 to 64. Around 31.34 percent of the incoming movers were 65 or older.

Late Retirement Could Increase the Lifespan

It may seem unbelievable but is has now been proven that late retirement could increase the lifespan. It pertains to almost all people, whether they consider themselves healthy or unhealthy. A study has found that that being active is the key thing that improves the lifespan, the other factors being the economic and social benefits one enjoys while being employed.

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Study Says Late Retirement Could Increase the Lifespan

The study that says late retirement could increase the lifespan was conducted by researchers from the Oregon State University. It highlighted that people who worked past the age of 65 were more likely to have a longer life as retiring early could be a risk factor for dying at an early age. The researchers also found that healthy adults who retire at 66 had 11 percent lower risk of death from all the causes. It included people from different demographics and those who had different health as well as lifestyle issues.

Unhealthy People Also Benefit

The study that mentions late retirement could increase the lifespan also exposes the fact that unhealthy people could also live longer if they work late. It clearly indicates that factors other than the health reasons may affect the post-retirement mortality.

Not Applicable to All

Chenkai Wu who was the lead author of the study that reveals late retirement could increase the lifespan stated that though the results of the study may not apply to everyone, but the researchers think that work brings a lot of economic and social benefits to people which could impact the overall length of their lives.

The Publication

The study which states late retirement could increase the lifespan was published in the Journal of Epidemiology and Community Health. It was co-authored by Assistant Professor Michelle Odden, Associate Professor Robert Stawski and Gwenith Fisher of Colorado State University. This research was supported by a grant offered by the National Institute on Aging. It was the basis of Wu’s master thesis that is in human development and family science. It is pertinent to mention here that Wu is currently pursuing a doctorate in epidemiology.

Key Strategy

Commenting on the focus on the US for the study that says late retirement could increase the lifespan, Wu mentioned that he chose the US because the people in the country have more flexibility about when they are going to retire when compared to other nations. So, it made more sense to look at the data from the US. He also studied the health impacts of delaying the retirement because most of the research is nowadays focused on the economic impact of the same.

The Data

The data that formed the basis of the study that declares late retirement could increase the lifespan was the data collected by another study, a Healthy Retirement Study conducted by the University of Michigan. Interestingly, it was also funded by the renowned National Institute on Aging. In the Healthy retirement study, the data was collected from 1992 through 2010 and it was the data of U.S. adults. There were over 12,000 participants in that study. Wu, however, focused on 2,956 participants who began to be a part of the study in 1992 and retired by the end of study period, i.e., the year 2010.

Mitigating the Bias

It is a fact that poor health is one of the reasons behind why people retire early and it often leads to earlier death. So the researchers wanted to find a way so that a potential bias is this regard could be mitigated. In order to do that, the researchers divided the group into retirees who thought health was a factor in their decision to retire or those retirees who admitted to being unhealthy and the retirees who said that their health was not a factor in the retirement decision. After the division of data, about one-third of the group was in the unhealthy category while two-thirds were in the healthy category. At the time of the study, about 25.6 percent of the unhealthy and 12 percent of the healthy retirees died.

The Mortality Risk

The study claiming late retirement could increase the lifespan also found that healthy retirees who worked a year longer than 65 had 11 percent less risk of mortality while unhealthy retirees working a year extra had 9 percent lower mortality risk.

Unmistakable Pattern

Stawski, a senior author of the paper mentioned that though the healthy group is very advanced with regard to the education, wealth & health behaviors and lifestyle but these things barely have any effect on the lifespan of a retiree who opted to work for one more year. He added that the findings clearly mention the fact that people who remain active and engaged in the later year of life highly benefit from it.

Need for More Research

The researchers of the study that emphasizes late retirement could increase the lifespan also stressed on the fact that more research is needed to prove that working extra can increase one’s lifespan. There is a need to know about the lives, health and well-being of people post retirement as these factors could also influence the longevity of one’s life.

Federal Employee Health Benefits and FEGLI at Retirement – Robb Fenton

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If you’re a federal employee who is considering retirement and you are covered by both the FEHB (Federal Employee Health Benefits) program for health insurance and the FEGLI (Federal Employee Group Life Insurance) plan for life insurance coverage, then you may need to factor in what your options are in terms of taking these benefits with you when you go. This is because, while there are ways of maintaining this protection, there are distinct criteria that you will need to meet in order to continue the coverage after you become a retiree.

How to Continue FEHB Coverage After Retirement

In order to be eligible for continuation of your FEHB coverage after retirement from service, there are two primary criteria that you must meet. First, you will need to have retired on an immediate annuity. This means that you will have to have a retirement annuity that starts accruing no later than one month following the date of your final separation from service.

In addition, you will also have to have been either continuously enrolled as an employee or as an eligible covered family member in any of the FEHB plans during the five years of service that immediately preceded your retirement. (It is important to note that it is not required that you be enrolled in the same plan for each of these five years).

If, however, you have less than five total years of service leading up to your retirement, then you will need to have been enrolled in a FEHB plan during all of your time of service since the first opportunity that you had to enroll.

Continuing Your FEGLI Benefits

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In order to keep your basic FEGLI coverage in retirement, you will also need to have five years of service. If so, you will have three options in how you may retain these benefits. These include the following:

  • 75% Reduction – With this option, a reduction in coverage will begin the second month following your 65th birthday, or the second month following your retirement, whichever occurs later. Then, the coverage will decrease by 2% every month until it reaches 25% of its original amount, where it will then level out.
  • 50% Reduction – With this option, you can retain 50% of your original amount of coverage. The reduction also starts during the second month after your 65th birthday, or the second month after retiring – whichever occurs later. With this option, the coverage will decrease by 1% every month until it gets to 50% of its original amount.
  • No Reduction – With the no reduction option, you may retain the full amount of your FEGLI benefit.

Options for Those Not Eligible to Keep Their Benefits

If you are not eligible to continue your FEHB or FEGLI benefits, then you may still have various options. For example, with the FEHB plan, you will have an extension of 31 days of coverage at no cost to you. Following that time, you can either drop the plan altogether, or convert it over to an individual contract. You may also request a Temporary Continuation of Coverage. This will allow you to continue the FEHB benefits for up to 18 months at a premium cost of 102%.

For the FEGLI plan, you will also have a no-cost 31-day coverage extension. However, after that time period has elapsed, you will only be able to either drop the coverage completely, or to convert some or all of the benefit over to an individual policy and likewise pay the premium out-of-pocket.

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California Retirement Fund is facing a Shortage

It has been recently revealed that the California Retirement Fund is facing a shortage. As a result, the taxpayers have to find a way to deal with it and make up for the losses. Critics say that too much focus on the retirement funds is the reason why the other necessities like schools and public safety are taking a backseat in the recent times.

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Repercussion of The fact that California Retirement Fund is facing a Shortage

The major repercussion of the fact that the California Retirement Fund is facing a shortage is that the money from the state’s General Fund would be used to fill the gap. The General fund is supported by the taxpayers. It also means that the Caltrans and DM workers would be required to pay more along with the firefighters as the California Public Employee Retirement System or CalPERS is about 68 percent funded.

More Side Effects

A major side effect due to the fact that the California Retirement Fund is facing a shortage is that CalPERS has lowered the rate of return from 7.5 to 7 percent. It again signifies that the taxpayers would be responsible for billions of dollars in higher contributions every year. It includes state workers as well as the school districts. For those who don’t know, the CalPERS is worth $303 billion but it is $111 billion short of what’s needed to pay the pensions in the future.

Why California Retirement Fund is facing a shortage?

The main reason behind the fact that the California Retirement Fund is facing a shortage is that the investment returns are way below the expectations. Richard Costigan who serves on the CalPERS Board of administration stated that trying to forecast the returns is somewhat like a crystal ball. He also said that they have got to make sure that the fund is solvent so that the deserved benefits can be paid. As a result, the state workers who were hired post 2013 will be paying 1 to 3 percent more out of their own paychecks for the retirement.

Critics’ Opinion

Dan Pellissier of the California pension reform believes that just because the California Retirement Fund is facing a shortage, it does not mean that other critical needs should go unfunded. He said that in the recent times, the retiree healthcare costs have been taking the biggest budget pie every year which is taking away the attention from other necessities like roads, public safety, and schools.

Single People Are Not Prepared for Retirement

It has been proven again and again that Americans are not prepared for retirement. But a new report has highlighted that single people are not prepared for retirement as they barely have any savings. Some of them have no savings while the others have got only a small amount. Women particularly need to save more for retirement as compared to men. The experts also shared an opinion on how much you must save for retirement.

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What Proves that Single People Are Not Prepared For Retirement?

A report crafted by Economic Policy Institute (EPI) has proven that single people are not prepared for retirement. The report says that a lot of people who are over 56 to 61 years of age and are single have no retirement savings at all.

The Comparison

The report further states that about 43 percent of single men and about 42 percent of single women have some retirement savings. This number is far below the people who are married and have retirement savings. As per the report, 65 percent of married couples have retirement account savings.

Small Savings

The EPI report also highlights the fact that single people who have some retirement savings have not stashed away a particularly good amount. The average of savings done by single people comes down to just $30,000. In contrast, the married couples have more than double saved towards retirement. Their average savings for retirement comes around $78,000.

Women are More Vulnerable

The report also points out to the fact that most people need to set aside a better amount towards retirement. It states that women are particularly more vulnerable as compared to men because they tend to live longer and they have a great chance to outlive their savings.

Required Amount

As per the experts working for a retirement plan providing company, Fidelity Investments, single people are not prepared for retirement or the Americans, in general, must have ten times their final salary in savings if they wish to be financially ready to retire at the age of 67.  Doing so would ensure that a person has a comfortable retirement and does not outlive the savings stashed for retirement. Outliving the money one has saved for retirement can be the worst nightmare of most people and it would be wise to avoid it by ensuring that a person follows expert advice with regard to retirement savings.

Want to Live Actively Post-Retirement? Head Here…

When people plan to move to a new place post-retirement, they often give too much value to the tax breaks, cost of living and the climate. They even forget the fact that the place they are moving to must have some scope of living more actively. Seniors who love to live actively have something to rejoice about. A new survey has found the best cities to live in if one wants to live actively post-retirement.
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The Top Three Cities Where One Can Live Actively Post-Retirement

According to a new survey conducted by the Active network that regularly tracks the event registrations for athletic events, the top three cities where one can live actively post-retirement are San Diego, Cleveland, and New York.

The Survey

The survey was extraordinary as it tracked the activities of extremely active people by keeping an eye on registrations done for cycling, running, events, endurance camps, triathlons, duathlons, endurance clinics, mountain biking and walks. Though the top cities that were listed are warm, like Dallas, San Diego, and Houston, the list also includes cities like Philadelphia, Chicago, and Pittsburgh.

Seniors Love Running

The same survey also highlighted the fact that seniors like to run in order to stay active. More than 70 percent of the seniors signed up at running related events. The number of people in the younger generation signing up for running events beat the number of senior citizens doing the same.

Walking and Cycling is Topmost

The survey also exposed the fact the people over the age of 55 liked to participate in the walking and cycling events. Their participation in these events was higher than any other age group.

The Changing Trend

It is pertinent to mention here that Active Lifestyle has been a part of a trend that takes festivals, transportation, senior-friendly road crossings and sidewalks into account while deciding the best place for retirement. The extreme activities such as 100-k bike rides and marathons have also become hot trends that must be considered.

Why consider active living post retirement?

Many senior citizens will argue that there is no point in considering cities where one can live actively post-retirement as extreme sports and living too actively is not feasible for several them. In such a scenario, they must remember that living actively is a great way to spend all the idle time one has after retirement and make like-minded friends.

Retirement Woes of Black New Yorkers Escalating

A recent survey has highlighted that the retirement woes of black New Yorkers are on the rise. They have not saved enough for retirement and they are barely getting by. They don’t intend to retire in the New York City. Many of them haven’t looked up basics like social security and they haven’t even started saving up for retirement.

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The Survey on Retirement Woes of Black New Yorkers

The survey on retirement woes of black New Yorkers was conducted by Siena College in association with AARP New York recently. It stated that the African-Americans belonging to the Gen X and baby boomers generation who live in New York City are not prepared for retirement. The survey was conducted telephonically and more than 600 African-Americans participated in it.

Key Findings

The survey on retirement woes of black New Yorkers revealed that 63 percent of the African-Americans between the ages of 36 to 70 are worried about having enough money to retire. It includes 72 percent of middle-class Gen Xers who were earning $40,000 to $120, 000 on an annual basis. It also exposed that 6 out of 10 respondents thought that they were just getting by. The reason behind the same could be increased costs of necessities such as housing, food, and utilities.

In the survey, about 47 percent of middle-class Gen Xers also mentioned that they don’t plan to live in New York post retirement.

Being Unprepared

The survey on retirement woes of black New Yorkers also mentions that about 56 percent of the African-American Gen Xers haven’t researched the social security benefits. About 61 percent have not researched the Medicare benefits and 74 percent have not written a plan such as a budget for retirement. Around 62 percent even do not have a plan for care if they become disabled or sick. Almost half also stated that they have not discussed retirement concerns with their families or life partners.

No Basic Steps

Commenting on the results of the survey on retirement woes of black New Yorkers, Reggie Nance who is a member of AARP stated that most people want to retire at a certain age or when they become eligible. The survey found that majority of African-American Baby Boomers and Gen Xers are concerned about saving enough for retirement but still they are not taking all the necessary steps to retire such as sitting down to create a budget or holding meetings with a financial planner.

Women with 401(k) Plan Prefer Wealth over Health in Retirement

A survey has revealed that most of the women who have a 401(k) plan would opt for wealth over the health. The survey also pointed out that women usually have longer careers than men and explained its reasons. It found that Millennials, in general, have less confidence for retirement but their confidence increases once an advisor helps them make financial decisions. Experts believe that automatic investment advice should be available to all Millennials.
A survey says that women would like financial security more in retirement as compared to good health. They need 401(k) plans’ investment advice too.

Money Matters Most in Retirement for Women with 401(k) Plans

The results of the survey say that seven out of ten women would like to have more money to enjoy the retirement over the ability to stay healthy during the golden years. In contrast, just 30 percent of women give a lot of value to health than anything else. The survey was conducted by Schwab Retirement Plan Services online by polling 288 people between the ages of 25 to 35 who had 401(k) Plans. The polling was done in June this year.

Working Late

In the survey 3 of ten women admitted that they would be working when they reach 70 years of age as compared to 20 percent of men.  Catherine Golladay who serves as the Senior Vice President of 401(k) participant services and administration at Schwab Retirement Plan Services said that women usually expect to have longer careers than men. He also added that some of the reasons why women need to work longer are because they spend a lot of time out of the workforce for caring for a family member.

The Confidence

The survey also exposed that only a quarter of women participants were very or extremely confident about the investment choices made by then with regard to the 401(k) plans. Men were more confident as 57 percent of them agreed to being very or extremely confident with regard to the investments in 401(k) plans.

Need for Guidance

Another vital thing highlighted by the survey is that people with professional investment guidance feel very or extremely confident with their investment decisions. About three-quarters of men and women accepted that they need professional guidance with regard to the 401(k) plans’ investment decisions. Golladay stated that the most comprehensive solution for this trend would be to ensure that all the Millennials get automatic investment advice from time to time. It would help them to boost their savings as well as their confidence in retirement.