Category: Retirement Planning

Why this is no age to retire

 

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dollarphotoclub

Today, one in six of the UK population is aged 65 or over.

Until quite recently people of a certain age felt defined by what passed as appropriate for their parents, and their forebears. This earlier attitude, bringing with it all things ageism, was reinforced by a lower life expectancy, and by the many legal and social rules in our society which dictated what should or should not be done at certain times in life, particularly in later life. This was no less apparent than Continue reading “Why this is no age to retire”

Keeping purpose in your laterlife

Vector silhouettes of man.

A recent management magazine article inspired this post. The word purpose sprang out. So without entering into a sermon, what does it really mean – purpose? It could be said young people have by dint of youth purpose in their lives: to grow-up,expand their horizons,achieve ambitions, have families, help others, and so on. But what about older people in later life? Continue reading “Keeping purpose in your laterlife”

How to live comfortably and with independence in later life

sweet home

There has been much in the recent news about the growing belief that older people though finding themselves in inappropriate homes as some of their powers decline would far prefer to stay independent of a care home environment.

Perhaps not surprisingly a high number, 9 in 10 over 50s, according to the recent Daily Telegraph report of people surveyed about where they would prefer to live and be cared for, opted for staying put in their own homes. It seems though that most of us leave it far too late even to start any sort of conversation with anyone, including close family. We will discuss finance for older age, even funeral arrangements but not the long term living space we need or desire to maximise enjoyment of later life.

In the case of staying home and independent,planning for our living space in older age is of course not a new concept although there can be no ‘one size fits all’ approach to deal with the many requirements of individuals with different levels of health and abilities, as well as preferences for a particular lifestyle. There is a range of ‘fixes’ that can be considered to help maintain good quality of life, from small to medium ‘tweaks’ like adjusting the height of work surfaces ,installing better handle design for easier opening of doors and windows; also making more open living spaces for wheelchair access, for instance.At the other end of the range, there is the complete design-build always ‘fit for purpose’ living space. This looks to provide a living place in which to age, with practical comfort and aesthetics in mind.

Such a space should be able to function so as to enable both the able in mind and body and the disabled to co-habit in comfort and style.This latter of course is the holy grail,as it were, of planning for later life, and is often referred to as Universal (accessible )design which produces a broad range of practical ideas to incorporate in buildings and environments making them inherently accessible to people regardless of age. This helps at a social level so that the more elderly do not find themselves marginalised in their own homes and they can continue to enjoy the society of younger people.

Universal design was the brainchild of an architect who was himself confined to a wheelchair.His idea is a place to start a conversation about future living.It is a wide subject. You can start your own conversation with a quick start guide to learning how to live comfortably and with independence. Startling statistics from AgeUK tell us that the number of people over 65 in community-based care and support at home is falling rapidly in the UK. This is seen to be a trend working entirely against our wishes.It is time we all prepared better for our care in old age if we wish to  be where we want to be and not allow ourselves to end up in places not of our choosing. Aging in a Palace is a slim volume but a good read. It may be laced with many questions and few specific and detailed solutions, but it is thought provoking.

Could downsizing your property give you a new lease of life?

Chastleton House

At a time when much debate in the UK centres on insufficient housing to cater for the needs of a burgeoning population,encouraging downsizing by older people to make way for buyers of a younger generation is again being put forward as part of a solution.

Apparently,according to the Prudential, more than 2m homeowners over the age of 55 and over plan to downsize in the next few years.Another report suggests that downsizing could release upto £100,000 cash from the average property sale in the UK (in London this figure could be as much as £275,000).

So why and why now?

Homeowners have for many years felt trapped in the economic recession but they are now becoming more confident about the future and making a major lifestyle move. For many, the sale of a current property means:

-more appropriate living space as needs change in older age
-having more disposable cash perhaps to distribute to family
-help to ‘make ends meet’ in retirement,
-being able to spend on holidays and travel
-funds to secure long term care.

Most of those in the Prudential survey said that cash released by selling the equity in their property would be used to fund their later life.

Restricted physical mobility, high property maintenance and refurbishment costs,the ever increasing utility prices for gas,water and electricity are just some of the drivers for downsizing according to the website downsizingdirect .com

This trend to downsizing is is seen by many commentators as good for the general property market, freeing-up housing for those finding it difficult to step onto the property ownership ladder.Some feel it may also lead to the building of new developments to suit an ageing population where services and the benefits of community will provide greater fulfilment and quality of life.

The strong message seems to be for those looking to downsize is to seek appropriate professional financial advice. It is important to have a realistic expectation of what a sale will yield, and what will be left after all the costs of selling,buying a another home, and moving have been factored into the mix.

Have you had recent experience in this?Do let me know.

 

 

 

Budget 2014 gives pension savers from age 55 greater financial freedom.

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Until now, successive governments had refused to deal with the unfairness of a regime of pension regulation which had resulted in many people having to settle for significantly reduced returns on their savings at retirement. The Budget of 2014 seeks to change all that.
Greater access to pension investment
Before the Budget changes, it was calculated that more than 100,000 pension savers retiring this year could lose out on £210 million from uncompetitive rates offered to holders of small retirement pots.Now,effective 27th March this year, small pots can now be cashed-in up to a value of £10,000,also the number of such pots held has been raised from two to three.
There are changes to the provisions relating to drawdown of your pension, both capped and flexible,increasing the amount of you can take out of these arrangements.
You can read here more about how this and other pension changes in the Budget may affect you.
400,000 people will have greater flexibility over their savings.From next year, 320,000 retirees with defined contribution pensions will benefit from greater choice over these plans.
Obtain good professional financial advice
In making the right decisions for you- an annuity may still be the best option for many – obtaining good financial advice is essential. The government has promised to help you obtain the guidance you need.

Five steps to boost retirement income from your pension pot

7027606047_cac49c3b79_t21Retirement annuities have been much in the news lately.

According to recent reports, many of the estimated 400,000 people per year in the UK who purchase annuities are not aware of the best deals available to them. Only a mere 13 % apparently realised they could possibly do better than their first offer from an insurance provider.This is not a new problem – see link below : the60life.com/enhanced-pension-annuities-in-uk-revealed-the-shocking-truth-that-over-50-still-miss-out-on-extra-income/

Thankfully, there is extensive information out there to help pensioners obtain the best rate of income for their needs in return for their hard saved pension pots. The industry watchdog, the Association of British Insurers,(the ABI), has recently highlighted the disparity between the best and the worst annuity providers by publishing a much acclaimed ‘name and shame’ list. Some rates were up to 46% better than the worst.Retirees can help themselves with possibly the most important financial decision of their lives, and significantly boost their income for life. Four tips to help boost your income from an annuity are:

1. Don’t accept the first quote you receive. This might be from the provider with whom you saved your pension pot,or perhaps a suggestion from an online brokerage. As with most important purchases today ,you need to shop around for the best deal to suit you.You may be considerably better off this way.

2. Be sure to ask for and receive a guaranteed quote from a provider and not merely an indicative one. The latter might be attractive to you but it could be more than the income amount you eventually receive. So avoid this disappointment.

3.Make sure all your personal details have been included when applying for an annuity. Always fully declare the full state of your health which, if poor,could entitle you to an enhanced income. In this case, where a person is not likely to live as long as would normally be expected statistically an insurer will often be prepared to raise the annual income payable under an annuity.

4. On taking appropriate professional advice: don’t pay over the top for advice. Advisers say around 1.5 % of the pension pot is about right, but up to 3%, often without real advice given, is probably not. You can try unbiased.co.uk , the financial adviser website as a place to start your search.

5. Finally, having taken advice, it may be that taking a full annuity does not best meet your needs. Instead you may consider drawing down the whole or part of your pension fund gives you more control over your income and future investment. Note there are some restrictions to this option under regulations which limit the amount you can withdraw in this way. Your adviser can help with this.

Other useful (and unaffiliated) links to go to for information are:

National Association of Pension Funds (NAPF)

Association of British Insurers (ABI)

Citizens Advice Bureaux(CAB)

the60life.com/enhanced-pension-annuities-in-uk-revealed-the-shocking-truth-that-over-50-still-miss-out-on-extra-income/

 

Working on in the UK after state retirement age

According to the The Office of National Statistics (ONS), older UK people in the labour market are working longer beyond state retirement age.

Statistics out last month show the following numbers:

  • 1.4 million  the number of people of state retirement age and above, or double the number 20 years ago in 1993 when the figure was 753,00
  • 32 per cent of older workers are likely to be self-employed,as compared with 13 per cent for younger people
  • 8-in-10 older workers have been with same employer for five or more years. Around two thirds of them are working part-time having gone on from full-time with the same employer
  • Men working later in life tend to stay on in higher skill roles while women tend to stay on in lower skill roles
  • Just over a half (51 per cent) of older workers are in small organisations of fewer than 25 employees

Some factors for these statistics are put down to:

  • the number of ‘baby boomers’ reaching state pension age has grown faster than the increase in the general population
  • improvements over the last two decades in health and well-being
  • financial pressures arising from higher ‘elderly’ inflation and the economic climate over recent years
  • mortality rates record that this group are living longer making it necessary to provide for a longer period of retirement
  • a general wish to remain active in society

For a fuller and official report from the ONS including  an interesting animated video  you can go to this link http://www.ons.gov.uk/ons/dcp171776_267809.pdf

 

Enhanced pension annuities in UK: revealed the shocking truth that over 50% still miss-out on extra income

Around insurance and pensions circles,it has been well known for some time that the majority of people in the age group 55-64 years, with certain medical conditions, will not receive as much income in retirement as they should from their pension provider. And they are not losing out on ‘chicken feed’ either. According to MGM Advantage, a 65-year old with average health impairment could look to receive an extra 8,684 GBP during the first five years of drawing the annuity income. This extra requires the retiree to choose the right annuity. This may not be available from his current pension provider, and the prospective retiree should take advantage of what is called : the Open Market Option (OMO). Under the OMO, a person approaching retirement can shop around for the annuity that best fits his circumstances, even if that means transferring to another pension provider.

moneyfacts.co.uk says that qualifying conditions for an enhanced annuity include high blood pressure,high cholesterol, heart disease and diabetes, while higher amounts can be paid-out to smokers as well. The issue is that people approaching retirement and due to arrange for their retirement annuity income to start are ignorant as to what is available to them. They may not know they can shop around for a better deal elsewhere.They may not even know what an annuity is, let alone the OMO.

The clear message seems to be : before signing-up for a particular annuity it pays to obtain quotes for comparison with those being offered by their current provider. In these times of austerity and low interest returns to savers, few can afford not to shop around. Not doing so can mean leaving large sums of money on the table, perhaps losing a benefit  of as much as 50% increase in income over the period of retirement, and not where it should be, in the pensioner’s pocket.

Nigel Barlow, head of retirement at Just Retirement said : “Many of these people might now qualify [for an enhanced annuity] if they only knew about it.” Other experts have also gone on record to implore those approaching the time to decide where to obtain their annuity income to take action and not allow themselves to “to slide passively into poor retirement arrangements which will actually condemn them to a lifetime of low retirement income.”(Eddie O’Gorman of  The WAY Group), and Ros Altmann,of Saga, says that it is a case of trawling the pension annuity market and being aware  that you do not have to take the annuity income offered by the company you have saved your pension with.

So if you feel you should take action, and need more information, why not Google the organisations named in bold above. Do take appropriate professional advice. The60life should be the time of your life – it does help to have the best financial base that you can obtain, and to which you are fully entitled.Good luck!

 

 

Satisfaction with Life: the keys to a fulfilling retirement

This post keeps on the theme of retirement. It is well known that life expectancy among those currently retiring in their sixties means they could have some 25-30 years more ahead for them.But what to do with all that time?That is the challenge.

We are accustomed to seeing emphasis placed on good financial planning for retirement. Although having a good income behind you when you finally give-up the 40-hour working week knocks away a high hurdle when contemplating a long period of retirement, this of itself does not guarantee a fulfilled and positive retirement.So if you have looked forward to no longer having to answer to your boss, or the demands of every day business, how can you give yourself the chance to enjoy your new found freedom?How do you find satisfaction in your and real quality of life?

Recently, the University of Greenwich in England, undertook a survey to try and find the answer to the above and other questions. This study in conjunction with Laterlife Learning,looked at the responses to an e-survey conducted for the period October 2008 and January 2010. This study found that the keys to a fulfilling retirement were:

1. Having  aspirational reasons for retiring

2.Going on a retirement course

3.Having an active social life

4.Having someone to share retirement with

5.Having at least three of the ‘the Big Five’ personality traits

6. Money matters:Having a lack of financial resources,though, was not an impediment to satisfaction in retirement, and access to enjoyable experiences.

Some help tips in the conclusions from the survey report briefly are:

  • aim to retire on your own terms
  • find a goal for retirement that excites you
  • have activities that go beyond job work and non-work activities and breach the transition into retirement
  • gain a positive effect by attending a retirement preparation course
  • find an active social circle in retirement doing things you enjoy
  • look on money as only part of the retirement satisfaction jigsaw

You can read the full brief report providing the findings for the keys to a fulfilling retirement by the University of Greenwich

And,if you would like to also see what the pre- and post- retirement counseling course team Laterlife can offer

 

 

 

Key Factors in Retirement Planning

From Tax Credits at http://www.flickr.com

 

In retirement planning, always a thorny question to deal with is : what level of  income will I require  in order to maintain my standard of living when I eventually decide to retire? Financial and pensions advisers  call this target income the replacement rate, which is expressed as a percentage  of income received immediately prior to retirement.

So won’t I need at least as much income in retirement as before? You can count yourself fortunate if you can retire without taking a drop in income. But that you can probably keep up your level of spending on consumption with less income has been put down to the following:

  • In retirement most people pay less tax
  • For many the cost of saving for retirement stops
  • Most households look to have no mortgage left to pay for, or not  for long after retirement

At the  RETIRE Project at Georgia State University  required replacement rates have been studied and calculated for decades. As at 2008, the project estimated that households with earnings of more than $50,000 needed about 80 percent of pre-retirement earnings to maintain the same level of consumption. The Boston College finds achieving this level of earnings depends on the following factors:

  • Level of government income support, if any – the higher any supplementary financial support received the lower the retirement income provided by savings needs to be
  • Rate of return on savings– the higher this is, the lower the amount needed to be put away as savings
  • Age when savings begin– the earlier the start,the less is required to be saved by way of regular contributions
  • Age of retirement – the longer this is delayed, the lower the required saving rate needs to be

You can see a summary of the Boston College paper here:  “How important is Asset Allocation to Financial Security in Retirement?”

Adjusting any of these factors can make a great deal of difference to the prospective retiree. Starting to save early, and/or delaying retirement can make a significant difference to the outcomes. When retirement planning appropriate professional advice should be taken.

Why are the over 50s targeted unfairly to pay more for goods and services?

http://hasslefreeclipart.com

A number of worrying headlines have appeared in UK daily newspapers recently supporting the often held view that people over the age of 50 are being targeted to receive less favourable treatment than everyone else when it comes to buying goods and services.

Now,according to the Daily Mail, often products aimed at a certain age group, saving accounts for the over 50s for example, do not compare favourably with accounts available to younger people. This age group is often picked-out to receive the worst of the savings deals, and says it found:

‘Overall,… the average interest rate offered by the top 20 financial providers for the over-50s is 2.23 per cent – but it is 3.17 per cent for accounts aimed at all age groups.’

It reported that researchers had looked at all the cash savings accounts available, including instant access accounts, notice accounts and fixed-rate products. Cash Isas were excluded.

This is an outrageous situation, financial experts warned, that older savers are being sold less attractive savings deals than other age groups. For a fuller report you can continue reading at over 50s being offered worst savings deals where you can see details of  several of the  financial giants currently providing an unfavourable offering based on age. It is important for savers to note the terms of the saving contract being offered, and to be particularly  aware of interest rates which hold good only for a short period e.g. 12 months, and then fall back to a very small return henceforward.

 

The Right Retirement Planning Tools Help You Make Informed Retirement Decisions


Figuring out how much money you will need to carry you through your retirement years can seem like a complex undertaking. However, using the right retirement planning tools to plan for your retirement will make the task a lot simpler and complete. The right tools will help you see how much money you’ll need to put away to meet your projected retirement date, how much your retirement nest egg will be worth at retirement and beyond, and how much net income you will need to sustain the lifestyle you want through your retirement years, so that you can feel confident about the informed decisions you need to make.

The various retirement planning tools will take the guess work out of calculating the money you need for your retirement. Accuracy in planning your retirement needs is important for managing your money today. Not putting enough money aside for your retirement means not having enough money to provide that lifestyle you want during your retirement years; putting to much money aside will cause financial hardship and cause you to stay in the workforce more years than necessary.

Fortunately, there are plenty of internet how-to guides, retirement advice blogs and calculators available at your finger tips that you can use to help you get an accurate assessment of how much money you need for your retirement and can help you decide where to direct your retirement funds in the most profitable direction, so there will meet your retirement goals when its time for you to retire.

Online retirement calculators are some of the most handle retirement planning tools available. Most calculators are usually provided to you for free and without asking for any personal information about you. All you do is input the numbers and the calculators can help you project the cash flow you will need to maintain the lifestyle you want, when you need to start saving, how much you need to save and to save for retirement and how much money you need to retire with the plan of your dreams.

These online calculators will also provide important information about your 401K, IRA and Roth IRA plans, or other retirement savings plans.

There are a series of how-to guides that teach you how to plan a retirement savings plans portfolio to consider inflation and deflation of the market.

Other how-to guides such as how to avoid croaked or incompetent money managers and tips on how to know spot an honest financial planner from a fraudulent one are valuable tools for retirement planning tools that can make sure that your retirement portfolio is well funded when you reach your planned retirement date.

Some planning tools will allow you to do the calculations and save the information in a file so that you can go back to it from time to time and make any necessary adjustments to recalculate your projections. Many investment firms such as Charles Schwab, Fidelity, and Ameritrade provide online retirement planning tools to the general public. You don’t have to be a customer of the companies to use their planning tools.

There are many online retirement planning tools that require you to sign up as a member for free. But there are other tools that are only available to customers of the company offering the service.

With the right retirement planning tools you can make the right decisions today that will help you be happier and more financially secure when your retirement comes. It is important to remember to be flexible in your planning and make adjustments as circumstance in your life warrants.

Get the right tools to calculate how much money you need for retirement by visiting BestRetirementInvestmentPlan.com – a website that offers information on retirement planning including tips on setting retirement goals, do-it-yourself retirement planning software, and retirement planning tools to help you make the best of your financial planning for retirement.

 

What Are Your Retirement Planning Variables?


Article by Paul Sutherland

Having a secure, fulfilling retirement is a primary goal for most of us. At some point in the future we will no longer receive a “paycheck” from an employer and will instead rely on the income from assets we have accumulated and saved, plus income benefits from defined benefit pensions, Social Security benefits, distributions from retirement savings plans such as 401(k)s, deferred compensation, sale of our business and other investments. For most people, the overriding and often primary directive of financial planning is simply “retirement planning.” However, planning for retirement is not a particularly easy process.The retirement planning process involves using a retirement planning calculator and creating a road map toward your retirement goal and developing a plan to achieve that goal. The plan generally considers post-retirement budgeting, savings, tax management, debt management, pre-retirement budgeting and a host of other inputs all geared toward ensuring a quality retirement. However, planning for retirement takes time and judgment, because it involves many unknown variables. Among the top variables that may determine when retirement is feasible are lifestyle/family goals, longevity, future income tax rates, portfolio returns, the effect of inflation on expenses and future investment returns.Let’s review the basics of these variables as they relate to your retirement plan.

Lifestyle Goals Would you like to travel? Own one home or two? What is your retirement vision? These questions and others like them are necessary to help create a budget for your specific retirement needs.

Longevity Attempting to gauge how long we’re going to live in retirement is a task that’s becoming more and more difficult. Medical advances have led to increased life spans and continue to increase the mortality age. This is best illustrated by the Social Security system. In its original design, participants in Social Security were expected to live only a few years after they have begun receiving benefits. People live longer now, and life spans are increasing each year. We believe it is wise to project a retirement plan that assumes you’ll live to age 100.

Future Tax Rates Since we can only spend our “aftertax” income, it is imperative that we consider what tax rates our retirement income will be subject to. However, as government bodies at all levels change with each election, so do virtually all tax laws, including property tax, sales tax, state income tax and the granddaddy of them all, the federal income tax. Taxes such as property and sales taxes should be adjusted to account for cost of living increases. One thing is certain – taxes will exist in retirement.

Investment Returns How much you can withdraw from your “nest egg” each year is perhaps the most critical variable to retirement projections. Like the other retirement variables, the annual return on your nest egg will not be linear. As we know, the investments most suited for providing long-term income security into retirement are going to fluctuate. Financial markets can have long periods of up and down investment return cycles. We need continual income and that is the key. That’s why we work toward constructing portfolios that can provide lifetime income security for our clients. Many retirees get caught up in “short-termism” and use CDs, shortterm bonds and fixed annuities as core holdings in their retirement portfolio. But this investment strategy is very risky. While inflation causes things to cost more, deflation can keep interest rates low for many years, requiring the need for retirees to invade their principal savings to meet their budget needs.At FIM Group, we balance the long-term asset volatility with the more stable fixed investments to construct our clients’ portfolios. Our goal is to allow clients to live on the income generated from their diversified portfolio with a goal of providing income that can increase over time. That way clients won’t need to invade principal. Simply put, we call it living on the eggs (investment returns), not the chicken (principal).

Inflation Loss of purchasing power caused by rising prices must be included in any retirement plan. It is safe to say that one dollar will buy less in the future. As you progress into retirement, you should factor in giving yourself a raise periodically to offset cost of living increases.

Family Constraints Will you need to provide for or care for your parents and/or children in retirement? If so, how much will you help them? In summary, we are realistic about retirement planning and take retirement seriously. While the future is unknown, we do know that life will go on, some businesses will grow and pay great dividends, interest rates will fluctuate, politicians will fiddle with taxes, and inflation and deflation will fight it out. One thing, however, is certain: we will retire someday.

About the Author

The author has great knowledge about financial planning. He has offered financial planning to many people as well. He has written many articles on financial planning.

 

 

Best Retirement Planning Websites


Article by liame haley

Retirement is inevitable in any field on endeavor one is engaged in. No one continues to work in a company or organization till age 80 or more. There’s always a time to retire from active service. Well, retiring from service is one thing, but maintaining your life during such a period is another ball game altogether. One needs proper retirement planning in order to keep body and soul together during the retirement period.

By way of definition, retirement planning refers to various strategies put in place to ensure a stress-free enjoyment season during the period of retirement. In the financial context, retirement planning is all about allocation of funds for your pleasurable retirement season. You have to set aside a particular percentage of your regular income while you’re still in active service. The money you save at that time will then serve you when you retire.

Oftentimes, many people fail to plain their retirement as it should be. Such people end up becoming great burdens to their families when they finally retire from active service. In order to help matters, there are many retirement planning agencies that run their websites online. They are available to assist you plan your retirement before it dawns on you.

There are so many aspects to consider when planning your retirement. Oftentimes, you may not be able to plan those aspects well. You may not even remember to do something about that. This is the reason why various agencies have been established to assist those who desire to enjoy life during retirement season.

One of the aspects usually considered in retirement planning is the location and building where you’ll stay for the season. One weighing retirement must consider the best retirement cities. Such cities are nice locations to stay if you truly want to enjoy life to the full. Oftentimes, it’s very difficult to locate pieces of information about the retirement cities. However, when you go on a well-designed retirement planning website, you’re sure to locate all the various pieces of information you need.

Retirement websites abound online today. You can find a list of some of the top ones at http://www.over50web.net/finance/retirement-finance/some-top-retirement-planning-websites They are vital portals you need to visit in order to learn everything you need about your retirement. When you succeed in locating a good site that can help, you’ll discover the right way to save for your future retirement. You’ll also discover how best to invest some cash in various projects in order to safeguard your future.

Simply put, you’re sure of a better retirement season when you succeed in locating a good retirement planning website that can furnish you with the best of information. Your retirement season is sure to be a glorious and enjoyable period when you take time to plan it well. Why not go online today to gather more pieces of information?

About the Author

Dave operates a blog devoted to tracking the best retirement cities free ebooks.