aging

4 Questions to Ask Yourself Before Becoming a Caregiver

Ashley Eneriz — Wed, 10 Oct 2018 08:00:11 +0000

Becoming the caregiver for an aging loved one can be a rewarding, fulfilling experience. But it can also be very draining and demanding.

According to the National Alliance for Caregiving and AARP, nearly 44 million adults were family caregivers as of 2015. Most families take on caregiving to save money. With elder care facilities costing anywhere from $150 to $300 per day, it is easy to see why more families are opting to bring their aging loved ones into their home.

Even though becoming a caregiver might be cheaper than a nursing home, there are still some big questions to ask yourself before taking on this important role. (See also: 6 Financial Steps to Take When Your Aging Parents Move In)

Do I have the financial stability?

Caring for a loved one yourself is much more affordable than paying for respite care, but that doesn't mean it's free. It's important to consider all the possible costs involved, as well as if and how much the individual being cared for can contribute to the family's needs.

Here are a few caregiving expenses to consider:

Additional in-home nursing care or a home aide, which can cost an average $18-$19 an hour.
Possible renovations or additions to make your home more accessible.
The need for specialized equipment, such as shower seats, toilet bars, hospital beds, and wheelchair ramps.
Time off from your job. Even with reliable hourly nurses, life happens — and if a nurse is a no-show, you could be forced to call out from work.

If the person you're caring for is on Medicaid, some states allow for the individual to hire a family member to care for them. This means that you would get paid through Medicaid. Contact your state's Medicaid office for more information to begin this process. (See also: A Granny Pod May Be the Smartest Way to Care for an Elderly Parent)

Do I have the bandwidth?

Caring for an aging parent is not the same as caring for a child. You can't always include them in your daily errands or the family vacation. Even simple things like running to the grocery store or dropping kids off at school can be hindered if the individual you are caring for cannot be left alone. Consider how much time you really have to be a caregiver, especially if your loved one has frequent medical appointments they need transportation for.

Along with weighing the time costs of caregiving, think about how exhausting and emotionally taxing caregiving can be. Are you in a steady enough season of your life that allows you the time and patience to offer care? (See also: A Simple Guide to Planning For a Loved One's Long Term Care)

How will this affect the rest of my family?

Spending quality time with a loved one in their last years can be a special time for the whole family. However, individuals dealing with Alzheimer's or chronic pain have a harder time filtering their words and actions. Are you and your family prepared for the stress and potentially hurt feelings that may come with the situation?

You'll also need to take into account the needs of your spouse and children, if you have them. If your kids are young, will you have enough time and energy left to provide care for them as well? If you and your spouse are divided on the issue of bringing a loved one home, look into alternative choices. You don't want to jeopardize or even end your marriage over this. (See also: 9 Simple Acts of Self-Care for the Sandwich Generation)

Will I have help?

Not only do you need a strong emotional support system, but you will also need help to care for a loved one. Do you have other siblings or family members that are willing to step up and help, both financially and physically? Even young adult grandchildren, nieces, or nephews can sit with a loved one for a few hours a week to give you a much-needed break or time to run some errands.

If you can't find anyone to help in your caregiving tasks, do you have friends, family, or neighbors who are willing to offer a hand in other areas, such as dropping kids off at school or bringing over the occasional meal? It is important not to spread yourself too thin — your loved one is depending on you, so avoid burnout as much as possible.

Ultimately, choosing to become a loved one's caregiver is a very personal matter. Most people want to care for an aging parent or family member out of love and respect, but it's important to also consider how stressful caregiving can be on your wallet, family, and physical and mental health. (See also: How to Talk to Mom and Dad About Their Money)

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This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Things to Consider Before Retiring to a Tiny Home or RV

Carrie Kirby — Mon, 21 May 2018 08:00:26 +0000

Magazines and design blogs are full of stories of retirees downsizing to tiny homes to cut their expenses and responsibilities. With costs around $30,000 and monthly utilities as low as $15, some enthusiasts even say that trading a traditional home for a tiny house or RV allowed them to retire early. While the tiny house trend is pretty new, retiring to a life on the road in a recreational vehicle is an established tradition among retirees.

Should an RV or tiny house show be your first stop once your final day on the job is over? Not so fast. Committing to a major purchase immediately after retirement is rarely a good idea, and there are plenty of important things to consider first.

1. Will your tiny home be legal?

Federal codes as of 2018 state that a house must be at least 88 square feet, but many states have additional regulations. In areas of North Carolina, for example, you need at least 150 square feet, plus 100 square feet more for each additional resident.

2. What will you do with your stuff?

The average retiree has a lifetime's accumulation of possessions in their home: Gifts from children and grandchildren, collections, holiday decorations, kids' left-behind sports trophies. A tiny house or RV won't have room for any of that. You'll have to dramatically downsize, whether that means putting things in storage, giving them away, or having an estate sale.

3. What will the furnishings cost?

While you may be saving money on mortgage, utility, and property taxes with a tiny house or RV, don't forget that you probably won't be able to reuse any of the furniture from your previous home. You'll have to pay for built-in or custom-built furniture and appliances. (See also: 5 Unexpected Costs of Living in a Tiny House)

4. Will you be able to age in the home?

RVs and tiny houses are often perched on wheels or raised above ground. You may need to climb a ladder to reach your bed every night. What will happen if you end up using a cane or wheelchair? Will you be able to retrofit your tiny home or RV to make it accessible? I came across one retiree who had a rock-climbing harness modified to lift her into her loft every night; I can't help wondering how much she likes that setup if she has to use the bathroom at 2 a.m.

5. How will this affect family traditions?

If you hold a big Thanksgiving dinner every year in your regular home, don't imagine you'll continue the tradition in your tiny home or RV — at least not in the same way. These pocket-size residences have no entertaining space, and their kitchens don't facilitate cooking for a crowd. What will happen to the events you used to host? Will you invite loved ones to camp near you and eat turkey at a picnic table? Or will an adult child take over hosting?

6. Where will you park?

My husband and I sometimes daydream about spending our retirement parking an RV in the driveways of our grown children, visiting one after the other throughout the year. If this is your plan, what do your children think of it? Do they have an off-street place for you to park? What about water and sewage hookups? If you want a more permanent place for your tiny home, you'll need to find out if your state has tiny house co-ops, or what the rent would be in a trailer park. You can find out more about zoning through the American Tiny House Association.

7. Will your relationship withstand the change?

If you and your spouse have both been working for decades, retirement itself will be a big change involving a lot more togetherness than before. Are you really ready to give up private spaces in your home to spend your days within a few feet of one another? If your spouse leaves his shoes on the floor, will it irritate you to no end that you can't even walk around them? Tiny homes and RVs typically have just one bathroom; are you ready to share?

8. Can you get a loan?

Some retirees are able to buy an RV or tiny home outright after selling their traditional home. But if you need a loan, you won't be able to take out a standard mortgage on a recreational vehicle. You'll need an RV loan, and since RVs are considered a luxury item, you'll need excellent credit to qualify. With a tiny house, you'll need either an RV loan or a personal loan. (See also: 3 Ways to Finance a Tiny House)

9. Which should you get, a tiny house or an RV?

Some people wonder why tiny houses cost more than RVs. Is it just because they're cute and trendy? Actually, there is a substantial reason: A good tiny house should be durable enough for everyday use, while RVs are built for vacation use, and tend to fall apart faster.

A word of advice: Try before you buy

Whether you think a tiny house or an RV is your ideal future home, you should rent at least one before you jump in and buy. Weekending in various styles of tiny homes and/or RVs is a good start, but remember that vacation life is always easier and more fun than everyday life. If you are serious about making the lifestyle leap, consider packing up and moving to a rented tiny home or RV for a substantial amount of time, like six months or a year, before you start shopping in earnest.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Money Moves You're Never Too Old to Make

Tim Lemke — Wed, 09 May 2018 09:00:13 +0000

We often assume as we get older that money matters become more simple, and in many cases, this is true. You may be done worrying about saving for the future, and may be free of many of the expenses you had when you were younger. But this doesn't mean you're too old to make financial decisions that will still benefit you.

There are many money moves that you made when you were younger that still apply. Not all of these actions below will make sense for everyone. But age, by itself, shouldn't rule them out.

1. Buying a home

You may think that by a certain age, it makes no sense to purchase a home because you may not live long enough to pay it off in full. But there are some great financial advantages to homeownership, even for older people.

For one thing, if you want your retirement nest egg to last, you are better off putting money into something that builds equity and may increase in value. That's money that can be used in the future for your long-term care, or passed on to your heirs. Some older citizens even fund their retirement using a reverse mortgage, which allows you to draw equity from your home to pay expenses.

Additionally, when you own a home, you can make adjustments to the design and features to accommodate any health needs. For example, you could install a chairlift or add a bedroom on a lower floor so you won't have to go up steps. These are things you may not be able to do if you live in a rental property. (See also: 5 Benefits of Carrying a Mortgage Into Retirement)

2. Getting life insurance

Many older people don't bother with life insurance past a certain age, because the premiums do get more costly. But there are many cases where it makes sense.

If you are still working and your spouse relies on that income, term life insurance can come in handy. You may also have some debt — mortgage debt, for example — and want to ensure there is enough money to pay it off if you pass away. Guaranteed Universal Life policies can be good for seniors who want to ensure there's money to pay for final expenses or estate taxes.

There are many different insurance products; be sure to closely examine the costs and benefits of each to see if they make sense for your situation. (See also: 5 Kinds of Insurance Every Retiree Should Consider)

3. Shopping for health insurance

We assume that older Americans are simply covered by Medicare and that there's nothing more they need to know. But the reality is that Medicare doesn't cover everything, and it's often important to get supplemental insurance to protect yourself.

You are never too old to shop around to find the lowest premiums and out-of-pocket expenses. No matter your age, it's smart to re-evaluate your insurance periodically to ensure you have the right coverage at the right cost. This is especially true if your health situation changes. (See also: How to Make Sense of the Different Parts of Medicare)

4. Investing

If you are retired, you may be of the mindset that you already have all the money you need to live comfortably. But are you sure this is true? People are living longer these days, and you can spend as much time in retirement as you did working. Thus, it may be necessary to continue to accumulate money as you get older.

Even if you think stocks are not right for you at this stage of your life, continuing to buy bonds, real estate, and other investments can help bolster your nest egg and ensure that you can cover all of your life expenses as you age. (See also: 7 Reasons to Invest in Stocks Past Age 50)

5. Rebalancing your portfolio

At a certain age, you may feel like your investments don't need much baby-sitting. If you've shifted to a lot of fixed-income investments, it may be true that your portfolio doesn't need much maintenance. But that doesn't mean you should ignore it.

Even the oldest investors need to check in to see if they are on track to hit their savings goals. All investment portfolios can get out of whack if they are not monitored properly. An older investor may find, for example, that stocks make up too much of a percentage of their portfolio and represent a risk if the market goes down. (See also: Think Outside the Index When You Rebalance Your Investment Portfolio)

6. Building an emergency fund

You may have accumulated enough money to retire on, but did you take into account the cost of a new roof for your home? Did you count on thousands of dollars in unreimbursed medical expenses? It helps to have a separate account to cover these types of expenses, separate from the money you use to cover everyday costs.

If you are no longer working, you may still be able to fund your emergency account through income from stock dividends, interest, or capital gains. Just be sure you're not tapping into money you may need in the future for living expenses. (See also: Yes, You Still Need an Emergency Fund in Retirement)

7. Crafting a will

You are certainly never too old to outline your final wishes. If you haven't done this yet, don't delay. A will offers family members guidance on how you want to spend your last days, freeing them from making difficult choices. You can assign an executor to help carry out your wishes, and a clearly written will can help avoid fights over how to divide your assets. Many families have been broken apart due to spats regarding their inheritance.

It helps to have a will in place while you are still relatively young, but it's never too late to change a will as long as you are of sound mind. If you have a will already, it may be worth reviewing it periodically to make sure the information is accurate and up to date. (See also: 6 Times You Need to Update Your Will)

8. Saving for college

You can go back to school at any age. But you can also save money for your children, grandchildren, or anyone else who you'd like to see get a degree.

Most states offer college investment plans, known as 529 plans, that allow you to invest money for the purposes of education. You can designate a beneficiary of the funds and that money can be withdrawn tax-free as long as the money is used for qualifying education expenses. Depending on where you live, your contributions may also be tax deductible. The new tax law allows these funds to be used for K-12 schooling as well. (See also: The 9 Best State 529 College Savings Plans)

9. Starting a business

If you have skills and knowledge built up over a long life, why not make it work for you? Who says retirement has to involve sitting at home and doing crossword puzzles? Maybe you can start a quilting business. Perhaps you can launch a new career investing in real estate. Heck, you can build your own tech startup. At this point in your life you probably have the money, time, and experience to give it a go.

If you have your wits about you, you're never too old to start a new venture. Obviously, you need to be realistic about how much time and energy you want to devote to a new company, and you should avoid putting your retirement savings at risk. It's also important to have a clear succession plan in place to ensure the organization will keep running after you are gone. (See also: 5 Questions Retirees Should Ask Before Starting a Small Business)

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

14 Reasons to Celebrate Getting Older

Mikey Rox — Mon, 16 Apr 2018 08:00:07 +0000

I'll be the first to admit that I'm self-conscious about aging. Not so much the number (which is climbing to a hearty 37 years old this year) but rather that I can physically see the youth exiting my body as life experience replaces it. Getting older is a hard pill to swallow, but like everyone else, I have to do it, so why not look at the bright side, right? Thus, here are 14 reasons why blowing out one more birthday candle isn't such a bad thing.

1. You're more comfortable with yourself

Once you get over the hurdle of transitioning from a 20-something-looking 30-something into a full-fledged 40-looking 40-something, it starts to get easier. While I'm still anxious about aging, I'm not as worried about it as I used to be — like when I had five 25th birthdays because turning 30 was just too terrifying. Now I accept the process, plan a great birthday with someone I love, and have fun.

Superficiality aside, there are lots of other things that I'm more comfortable with now versus 10 years ago, like my personal and professional accomplishments, the relationships I have, my own autonomy, and having enough money to splurge on travel and nice dinners instead of bulk-buying ramen and cheap booze.

2. Retirement

If you've done what you can to set yourself up for a comfortable retirement, you can enter your golden years with excitement. Even if your finances aren't quite there yet, you can still make it work. You may not be able to travel the world like you planned, but things change and you'll find a way to make the most of what you've got. (See also: 7 Easiest Ways to Catch Up on Retirement Savings Later in Life)

Full retirement might not be what you want anyway, so part-time retirement may be more your speed. Basically, you'd have the freedom you've envisioned, but you'd fill some of that free time making money doing something you enjoy, like working part-time at a shop in town, driving for Lyft or Uber, or making crafts that you can sell on Etsy.

3. Discounts galore

Senior discounts are awesome, but before you even become an official senior, you'll start getting discounts on things like car insurance, which provides savings based on age and good driving records over time.

4. Your priorities change

What matters most changes as you get older and experience life's milestones, like getting married and having children. Neither of those things are in the cards for me — I did the former once, and that's enough — but my own priorities have changed based on what I would like for my future and how I plan to spend my money, like my mortgage, which is more important than the frivolous stuff on which I used to waste money.

5. Sex is better

Maybe it's because it takes more time in general to do the deed as you get older, but I've found sex to be much more passionate and meaningful in my 30s than it was in my 20s, and that's whether I'm in a relationship or not.

You also become more confident, and less tolerable of selfish partners, so as your standards go up, the sex you have just improves over time.

6. You learn to let the little things go

What mattered when I was younger — every. little. thing. — just doesn't anymore. I don't have the kind of time I did back then to worry about the trivial inconveniences. I brush it off and move on.

7. True friends reveal themselves

We go through a lot throughout our lives, and those crises will make or break friendships and other relationships. I used to think quantity mattered when it came to friends, but in the end, it's the quality of people with whom you surround yourself that will enrich your life.

At this stage, I'd rather have one committed person on the couch with me on a Friday night than pretend to enjoy the company of 20 acquaintances at a club, none of whom would be willing to give me a ride home if I needed it. (See also: 5 Friend Types That Can Hurt Your Finances)

8. Seeking the approval of others is a thing of the past

Do I care what people think about me? Yes. I would be lying if I said I didn't. But as I've gotten older, I care less about how they view me on the surface — how I dress, the way I look, the kind of car I drive — versus how they view my character. I've also accepted that I can't please everybody, so there's no point in trying.

Just do you and everything else will fall into place.

9. You don't have to do things you don't want to

I don't attend holidays or weddings or family vacations that I don't want to anymore. Life is too short to spend so much time (and money) being uncomfortable. Does this hurt other people's feelings? Perhaps. But there's a reason I'm saying no to these events. It's because it makes me feel uncomfortable, and I come first in terms of comfort.

10. You make more money (hopefully)

The older you get, the more experience you gain, and hopefully your paycheck continues to reflect that. Plus, you get to spend money on a home, children, and other things you always pictured spending money on as a typical "grown-up." (See also: How to Use Glassdoor to Earn More Money)

11. Food is better at parties

We barely ate at parties in my 20s, and if I did, it was bags of chips. But now, in my 30s, I attend parties with plates of hors d'oeuvres that hosts spend hours making. I'll take delicate crab puffs over stale chips any day.

12. You stress less about your physical appearance

I still worry about my physical appearance, and I'm in the gym trying to ward off pounds on a regular basis. But I've eased up on myself over the years, and now focus more on the health benefits of consistent sweat sessions, rather than having six- or eight-pack abs. (See also: 10 Ways to Age Well for $0)

13. You have a lifetime worth of memories and mementos

I have so many fond memories at age 36 and I feel like my life is just getting started. I'm looking forward to looking back on the memories 20 years from now. I hope I make myself proud.

14. Age truly is just a number

Once you reach a certain age, what is age anymore? Does 50 feel differently than 60? I'm not quite there yet, but I feel better physically, mentally, and emotionally now than I did when I turned 30, which makes me not as afraid to reach the next milestone birthday.

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Saving Goals for Every Age

Ashley Eneriz — Fri, 06 Apr 2018 08:30:09 +0000

It seems that current financial news is laser-focused on the crisis of skyrocketing student loan and credit card debt. While it's easy to focus on what the average American owes, we often forget that there is a savings crisis going on at the same time.

According to a 2017 GOBankingRates survey, more than half of Americans (57 percent) have less than $1,000 in their savings accounts. An astounding 39 percent of Americans have no savings whatsoever.

Retirement savings aren't faring well, either. According to a 2016 retirement confidence survey, more than a third of workers over age 50, and half the surveyed retirees, had less than $25,000 put away for retirement. Imagine trying to live the decades of your golden years on such a small nest egg.

It is time to save more money. Start following these savings goals for every decade of your life, and you won't end up as a sad savings statistic.

In your 20s

Don't waste your 20s thinking you have plenty of time to earn more and save more. Putting away even a small percentage of your income each month can translate into big savings by the time you hit your 50s.

Savings goals

In your 20s, your first goal should be to start an emergency fund and build it to $1,000. Setting up this emergency fund gives your finances a little cushion so that you can avoid dipping into debt every time something goes awry. Once you hit the $1,000 mark, build up your emergency fund to three to six months' worth of daily living expenses. This will protect your finances even further against expensive emergencies or a job loss.

Retirement goals

Before you leave your 20s, use your gross annual income as the target amount for how much you should have saved for retirement. For example, individuals making $40,000 per year should try to have $40,000 saved in their retirement accounts before turning 30. This goal sounds daunting, but it's achievable, especially if you start earlier rather than later. (See also: 5 Retirement Accounts You Don't Need a Ton of Money to Open)

If your company offers automatic deductions from your paycheck into a 401(k) each month, make sure you're enrolled so you won't have to consciously make the sacrifice. If you work for a company that offers a 401(k) match on a percentage of your contributions, make sure you're contributing enough to get that match. Otherwise, you're leaving free money on the table.

In your 30s

With the growing pains of your 20s out of the way, it's time to step up your personal finance game. During this decade of your life, you'll ideally start earning more money and keep the ball rolling on your savings goals. Remember to steer clear of unnecessary debt: In your 30s, you may be balancing a student loan with a new mortgage payment, so the less additional debt you take on, the easier it will be to reach your money goals.

Savings goals

If you have more expenses or are earning more money than you were in your 20s — especially if it's a lot more — you need to grow your emergency fund to a larger cushion. Aim to cover a year's worth of your daily living expenses (payments on your mortgage, student loan, credit cards, utilities, etc.). Once your emergency fund is fully funded, you want to keep that money there. Only dip into it when an emergency happens. After your financial emergency has been dealt with, you should get back to fully funding the account. (See also: 8 Ways to Decide if It's a "Fund-Worthy" Emergency)

Retirement goals

In your 30s, focus on doubling the amount in your retirement accounts to twice that of your annual gross income. Make sure your retirement portfolio is not set to an ultra conservative investment mix. You have several decades before retirement, plenty of time to recover from any market downturns, and you can afford to set your portfolio allocation to a higher risk. This will increase your account's earning potential while it still has a long time to grow. (See also: 8 Steps to Starting a Retirement Plan in Your 30s)

In your 40s

Your 40s can feel like an overwhelming financial decade. It's likely you have a lot on your plate; you may be trying to maximize your retirement savings while also putting away money for your kids' college education. Don't get discouraged; it's more important than ever to stay on the ball. (See also: 6 Personal Finance Rules to Live By in Your 40s)

Savings goals

At this point, your emergency fund should still have enough to cover a year's worth of living expenses. Once you've built enough safety savings, your extra dollars would better serve you elsewhere.

Your extra money should first go toward your retirement and paying off any high-interest debt. If your retirement accounts are well-funded, and your debt is low, you can then send your dollars to other important savings accounts, like a college fund for your kids, a family vacation fund, or a home renovation fund. Aim to contribute 20 percent of your monthly take-home pay to your desired savings account each month. (See also: 5-Day Debt Reduction Plan: Pay It Off)

Retirement goals

As mentioned above, retirement is a major priority now. It's more important to build your retirement savings than it is to put away money for your kids' college tuition or an unnecessary expense like a family vacation. Your kids will have options when they attend college, whether in the form of student loans, scholarships, or AP credits. You will not have any options if your retirement savings are not enough.

Aim to save four times your annual gross income in your retirement accounts before you leave your 40s. You don't have to switch your portfolio asset allocation to low risk, but consider revising your retirement accounts to a more moderate risk level. With your retirement savings looking healthy, don't fall into the temptation of dipping into it for emergencies or to pay your child's college tuition. It is seldom worth it. (See also: Are You Ruining Your Retirement by Spoiling Your Kids?)

In your 50s

As you enter your 50s, retirement is visible on the horizon. You may be facing unique challenges during this decade, such as changes to your health or caring for an elderly parent. This is the time to cover all your bases; accelerate your savings and play catch up where you need to. (See also: 6 Financial Steps to Take When Your Aging Parents Move In)

Savings goals

Your emergency fund should still reflect at least a year's worth of living expenses. If you have an aging relative who may need your care, or a health issue that threatens to leave you out of work, you may need to build your emergency savings further.

Your 50s are also the time to get serious about debt repayment. At this point, high-interest credit card debt is a large threat to your financial wellbeing. When you retire, you'll be living on a fixed income. If you didn't save enough money throughout your working life, that income may not be very high. The last thing you'll need to worry about are the bills piling up for your credit cards, car loans, or mortgage payments. Tackle these things as best as you can, now. The less debt you bring into retirement, the better.

Retirement goals

Before you leave your 50s, strive to have six times the amount of your annual salary saved for retirement. Your portfolio should now be managed as fairly low risk, though with people living longer than ever, it may still make sense to own a few higher-risk investments such as stocks.

In order to catch up on retirement savings later in life, take advantage of the additional money you can contribute to your retirement accounts once you hit age 50; in 2018, it's an additional $6,000 per year to your 401(k), and an additional $1,000 per year to an IRA. (See also: 5 Ways Longevity Is Changing Retirement Planning (And What to Do About It))

In your 60s

You are on the cusp of retirement, but this doesn't mean now is the time to slack off on savings. You should be working extra hard toward your goal of financial stability for your golden years.

Savings goals

The goal is to enter retirement with very little financial worry. You still need an emergency fund in retirement. If you don't have any liquid savings set aside for a crisis, focus on building that up. If your emergency fund is stocked, every extra dollar should go toward contributing the max on your retirement accounts and paying off the rest of your debt.

Retirement goals

Will retirement contributions even make a difference at this point? Yes! Boost your retirement funds as much as possible in the last few years you're still working. It's important to remember that life happens. You may have a plan to retire at 65, but a health issue, caregiving obligation, or even a layoff could force you to retire early. In a situation like that, you'll be so glad you continued contributing to your retirement accounts past age 60. (See also: What to Do if You're Laid Off Before You Retire)

Even in an ideal scenario, you'll still be relieved when you're ready to officially kick off your retirement with a well-stocked nest egg.

How much do you have saved?

How are you faring for your age group? Do you need to save more or are you right on track? If you are behind, don't get discouraged; now is the time to get your budget under control and accelerate your savings for a financially secure future.

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This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How Longevity Insurance Can Keep You From Outliving Your Money

Dan Rafter — Thu, 14 Dec 2017 09:31:09 +0000

You want a long and happy life. But what if that life goes on too long? Have you considered the possibility that you haven't stashed enough savings away to support yourself if you live to be 90, or even 100?

Longevity insurance might help ease your worries. But this product, also known as an advanced life-deferred annuity, does come with risk: You can purchase it, but, if you don't live as long as you expect, you may never benefit from it.

We're living longer

A study by the World Health Organization and Imperial College London found that by 2030, the average life expectancy for women will be 83.3 years and 79.5 for men. Currently, according to the study, the average life expectancy is 81.2 years for women and 76.5 for men. As people continue to live longer, it's only logical that they'll need more money to support themselves during those years. If you retire at age 67 and live to be 87, you'll need enough money to live for 20 years in retirement. But what if you live to be 100? That's 33 years spent without a regular paycheck. And that's where longevity insurance comes in. (See also: Is Long Term Care Insurance Worth It?)

Longevity insurance basics

Longevity insurance is designed to help retirees cover their expenses if they happen to live for a very long time. The product provides policyholders guaranteed income for life once they reach a certain age, usually 80 or 85. It's designed to provide extra income to supplement retirement savings that might be dwindling.

Of course, this protection doesn't come free. You'll have to pay a lump sum to open a policy, something you'll usually do right before you hit retirement age. How much the policy pays out once you hit the trigger age depends on how much you pay for your policy and how old you are at the time you purchase it.

MetLife provides a good example of how this works. According to a brochure advertising the company's Longevity Income Guarantee annuity, a man who makes a lump-sum payment of $50,000 at age 55 would receive an annual payout of $17,334 beginning when he turns 80. That same man would receive an annual payout of $30,619 if he waited until 85 to begin receiving his monthly payments.

A man who invests $50,000 at age 60 will receive $8,017 a year if he elects to start receiving payouts at age 75, and $21,741 a year if he instead waits until he turns 85.

The payouts for women are a bit lower, since women have longer life expectancies. In the example above, a woman who invests $50,000 at age 60 will receive annual payouts of $20,515 if she decides to start taking payments at the age of 85.

The drawbacks

While longevity insurance can provide you with additional protection throughout your retirement, it does come with some drawbacks. First, there's the price. In the MetLife examples, for instance, consumers are investing $50,000 into the product. That's a lot of money. And depending on where that money comes from, it could make a serious dent in what you are saving for retirement.

That's why the best candidate for longevity insurance is someone who not only expects to live a long life, but someone who can comfortably afford to part with that large lump-sum payment. You shouldn't spend more than 10 to 20 percent of your nest egg on a longevity insurance payment.

There's also inflation. Coverage that you purchase today won't be worth the same amount in, say, 20 years. Some longevity insurance programs offer inflation protection, adding the expected costs of inflation to your future payouts. Investing in inflation protection can be a smart move, but it won't be free. You'll have to pay extra.

Then there's an even bigger problem: How do you really predict how long you'll live? Say you elect to start receiving longevity insurance payments at age 85. What if you die at age 80? With basic policies, you'll lose that lump sum you invested 20 or 30 years ago. That's because basic longevity insurance products don't include a death benefit. The money you invested will be lost if you die before your payouts begin.

Some insurers offer the option of a death benefit so that your heirs can collect at least a portion of your payout if you die too early. Again, though, you'll have to pay extra for this flexibility. And your annual payout might also be lower as a way for insurers to recoup some of the extra risk they take on by providing you with a death benefit.

One last drawback is the lack of flexibility. If you plan to collect payments at age 85, but find you really need the money starting at age 82, you may be out of luck. Some insurers do offer an option allowing policyholders to access their money early, but these policies cost more and typically provide a lower annual payout.

Should you invest in longevity insurance? It depends on how much financial peace of mind is worth to you. Because this type of insurance does come with unusual risks, you'll have to determine if the fear of outliving your income is worth the chance of investing in an insurance policy that might never pay out for you.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

12 Questions to Ask When Choosing an Assisted Living Facility

Carrie Kirby — Wed, 01 Nov 2017 08:30:09 +0000

When a loved one ended up in physical rehab after a fall, I quickly learned what a bummer nursing homes can be. Although the staff tried to maintain a cheery atmosphere, it was clear that if my relative, Marion, stayed on as a permanent resident, she wouldn't be having much fun — and she'd be paying more than it would cost to live in the Four Seasons.

This is why so many families look to assisted living as an alternative to a nursing home for elders who can't live independently but don't need extensive medical support. Nearly a million Americans now reside in assisted living facilities, and that number has grown substantially in recent years, according to the Centers for Disease Control and Prevention. Assisted living facilities are able to charge less than nursing homes because they need less medical staff, and many offer activities and social opportunities far beyond what residents can find in nursing homes.

As we began our search for a place where Marion could enjoy her final years in comfort and safety, I learned that not all such homes are created equal. Here are some questions to ask as you look.

1. Can the facility provide the level of care needed?

Depending on the number and qualifications of staff, some facilities can help patients transfer from a wheelchair to bed or to the shower, while others can only accept residents who can transfer themselves, or at least help. Some facilities have locked memory care units for patients suffering dementia, but others don't. Before investigating further, find out whether your loved one could qualify to live there.

The assisted living management may send a representative to evaluate the potential resident. If your loved one doesn't qualify, ask if there is anything they could do to improve their chances. In our case, Marion was close to the level of self-care needed but was lacking some abilities, so she did additional physical therapy before being re-evaluated.

Beware of facilities that are so anxious to fill rooms that they accept residents they shouldn't. Make sure you ask exactly what help the residents get and what they don't. Find out what the staff to resident ratio is, including during the night shift. They may say they can help residents get up at night, but if one staffer is responsible for 100 residents, it's probably not happening.

If you are in touch with other families who have used the facility, or people in your local medical and nursing community, ask them about outcomes. If the local hospital has admitted a lot of residents from the facility due to falls, for example, that could be a red flag.

On the flip side, if you have a senior relative who needs little to no assistance, an independent living community might be a better option. In such a community, your elderly loved one can enjoy a more independent lifestyle with access to assistance only if they need it.

2. Is the facility licensed and inspected?

These facilities are regulated by state, so check with yours to find out the place's record. In California, you can look up a facility's license status, any citations or complaints, and view inspection records online. Other resources to check are the Better Business Bureau and your state's ombudsman.

3. Can the resident afford it?

Although assisted living facilities can cost a lot less than nursing homes, they don't come cheap. The average assisted living facility charges $3,750 a month, according to the Genworth Life and Annuity Insurance Company. And Medicare's not going to cover it. If you haven't previously been privy to your loved one's finances, now is the time to sit down and have a talk about assets and income, and determine where they can afford to stay and for how long. If there's a chance their money could run out in their lifetime, what's the plan for when that happens? (See also: 6 Things You'll Encounter When Taking Over a Loved One's Finances)

4. What activities are offered?

Once she was settled in her assisted living facility, Marion enjoyed wheelchair fitness classes, bingo games, church services, and other activities. Later, she moved to a memory care unit that offered activities with more direction, such as arts and crafts and cooking classes. If your loved one is active, you'll want to look for a place that offers field trips and maybe even cocktail hours. A more limited person may be content with offerings such as taking some sun on the patio.

5. What is included?

Is the resident responsible for setting up their own phone line and cable TV, or does that come with the rent? Will they eat every meal in the dining room, or cook in their own apartment for some meals? What about laundry service, and supplies such as absorbent pads? Consider the logistics in addition to the costs: Will you be responsible for shopping for supplies and bringing them to the resident? Who will make sure the phone bill gets paid?

6. Can the resident abide by the rules?

Some elders will only consider a facility where they may share an apartment or room with their spouse. Are residents expected to keep their doors open or are they allowed privacy? Can they come and go at will, or do they need to have someone come check them out? Can they invite guests to dine with them? Do they have to go to bed and get up at a set time? These are all questions your loved one needs to consider before agreeing to a facility.

7. What on-site services are provided?

For women of a certain age, a weekly salon visit is a valued part of everyday life. Nail care is also a big plus and can be a morale boost. Transportation service to shopping and doctor visits are also a plus.

8. How does medical care work?

Does the staff dispense medications? How will residents get to their doctor appointments? Is physical therapy available? How long will the room be held if the resident has to be hospitalized?

Some assisted living facilities are part of continuing care communities, meaning that they comprise independent living, assisted living, and rehab or nursing facilities, making movement back and forth easier on residents.

9. How long will they be able to stay?

The resident may qualify for the level of care offered now, but what about if they have a stroke or a fall and can no longer self-transfer or feed themselves? Does the facility have a section that offers a higher level of care, or would you be allowed to hire a nurse to provide additional assistance? Would your loved one have to move to a nursing home? What if your loved one needs hospice care?

It's important to find out in advance under what conditions the resident could be involuntarily discharged. Sadly, after a hospitalization, Marion was not allowed to return to the assisted living facility she loved because her self-care abilities had declined. Luckily, we were able to place her in another facility with a higher level of care. The new facility was more expensive, but not only was it better equipped to care for her, the management promised — in writing — that under most circumstances she would be able to stay for the rest of her life. When the time came for hospice care, it was provided right in her room, where she felt most comfortable.

10. Does it seem like a nice place?

Everything may look good in writing, but of course you will want to tour the facility your loved one would be living in — if possible, with the future resident. The National Consumer Voice for Quality Long-Term Care offers the following signs of quality care: Residents appear well-groomed; call lights and requests for assistance are answered quickly and kindly; residents are engaged in activities; the place appears clean and smells fresh.

One of the nicer assisted living facilities I have visited had a clean, large bird enclosure that residents loved to watch. Outdoor space and space for congregating and accepting visitors are nice too.

11. Will your loved one fit in?

If your elderly relative is still mentally nimble but needs help with physical needs, it's important to make sure they'll have peers in their new home. You can ask management about this, but it's one of the things you'll probably notice on a tour. Engage any residents in common areas in conversation to see if they seem willing and able to socialize with your loved one.

12. When could they move in?

The best facilities sometimes have waiting lists. Before either you or your loved one gets too set on a specific place, find out if there is a waiting list for the type of unit they want. If there is a long wait, consider where they will be living in the interim. If at home, is it safe to wait that long? If in a nursing home, consider that the longer someone stays in a situation that isn't right for them, the more their physical and emotional state can deteriorate.

It's never easy to watch a loved one lose independence. But when the time comes, asking these questions can go a long way toward smoothing the transition and making sure they are in the right place.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Ways to Age Well for $0

Mikey Rox — Fri, 06 Oct 2017 09:00:06 +0000

Aging isn't easy — I'll be the first person to admit that — and to make matters worse, it also isn't cheap. To keep the years off your face and body like your favorite celebrities, you have to shell out a substantial amount of cash for trainers, nutritionists, supplements, surgeons, makeup, and more.

Or do you?

Certainly there are plenty of quick fixes you can buy to make you look and feel better, but there are also ways to retain your youth and keep a healthy body, mind, and spirit for free. Take a look.

1. Get enough rest

You hear all the time how getting enough sleep is essential to your well-being. It's also critical to preserving your youth; as studies suggest that sleep deprivation is linked to aging skin. A good night's sleep is so powerful, in fact, that scientists from a UC Berkeley study found that deep sleep patterns can help prevent mental and physical disorders as you get older.

On the surface, says Sleep Train sleep and wellness expert Parinaz Samimi, "Recent studies demonstrated a correlation between inadequate sleep and accelerated aging of the skin where sleep-deprived participants displayed fine lines, uneven skin pigmentation, and diminished skin elasticity. For the sake of aging gracefully and not wasting thousands of dollars on products that don't work, investing in at least seven hours of shut eye could make all the difference — in your skin and your wallet." (See also: 3 Ways Good Sleep Makes You Wealthier)

2. Sleep on your back

Despite that about 41 percent of the population prefers the fetal position when sleeping (because, duh, it's the most comfortable), sleeping on your back is the best way to go if you want to keep your face tight.

"If you sleep on your face or your side, you will be more likely to get positional wrinkles that become harder and harder to get rid of over time," according to Dr. Lara Devgan, a New York City-based board-certified plastic and reconstructive surgeon. "In my plastic surgery practice, I can always tell which side of the face a person sleeps on because that side has more volume loss, deeper furrows, and poorer skin quality."

3. Sleep in the buff

Google the benefits of sleeping naked and you'll find plenty of results that'll have you slipping out of your skivvies before you sink into bed tonight. For instance, crawling under the covers nude helps decrease cortisol, increase hormone growth and balance melatonin — because your body is able to cool off more efficiently when disrobed — which leads to healthier, more restorative sleep and is proven to reduce anxiety, stress, and food cravings. So let it all out.

4. Talk with your hands and voice, not your face

I personally love people with faces full of expression, but all that grinning and wide-eyed wonder will eventually show on your skin.

"Minimizing gratuitous use of facial expressions, like frowning, furrowing the brows, and scrunching up the nose, will help keep years off your face," Dr. Devgan says. "Wrinkles and deep facial furrows are caused by repeated use of facial muscles, so a serene and placid resting expression are great ways to keep the years off your face."

I imagine it's difficult to train yourself not to express yourself with your eyes if that's part of your personality, and in that case, you should just accept your fate as a wrinkly old person who has told a million fantastic and enthusiastic stories.

5. Exercise regularly

You don't need a gym membership to get in a good workout (the world around you can be your fitness center), and studies have suggested that exercise helps slow the aging of skin, among other health benefits, like increasing your libido, making your heart more efficient, and improving blood flow. If you need more motivation to break a sweat without paying a membership fee, go for a jog outside, download a free exercise app, or try free videos on YouTube. (See also: 7 Online Workout Videos for Free or Cheap)

6. Avoid smoking

It costs zero dollars to abstain from smoking, which is an awesome thing since not smoking can't kill you. There are so many negative effects of puffing on cigs regularly, the most visible of which include loose skin under the eyes, uneven skin tone from oxygen deprivation, deep lines around the lips, age spots, damaged teeth and gums, stained fingers, hair loss (smoking can accelerate this genetic defect), and a greater risk of psoriasis. (See also: Here's How Rich You'd Be If You Stopped Smoking)

7. Seek the shade

Sun exposure is responsible for most of the visible aging on your skin, so it's important to limit yourself without the use of sunscreen. That costs money, of course, so in the spirit of this zero-dollar goal, I also recommend wearing hats and eyewear, sitting in the shade, and using umbrellas while at the beach.

8. Decrease sugar consumption

Sugar is my weakness. Well, one of them. And I try my darndest to limit my candy and cake intake because I don't want to be unhealthy. I'm not gettin' any younger, after all.

"Sugar can be considered to be the scourge of our declining health, contributing to obesity, cardiovascular disease, diabetes, and, yes, even accelerated aging," Samimi explains. "More often than not, people are encouraged to quit sugar for the purpose of whittling their waistline, unaware of the effects it has on our skin. Over-consuming sugar can result in wrinkles, damaging the collagen and elastin fibers that contribute to our skin's firmness and elasticity. The British Journal of Dermatology demonstrated an increase in wrinkles and sagging skin, which became evident in people age 35 who consumed more than the recommended amount of sugar."

On a more positive note, it's never too late to make healthy changes. It may not undo the damage, but you'll slow down the progression.

9. Treat your hands and neck the way you treat your face

We all have grooming routines with our products of choice, but you can use those products in areas you might be neglecting.

"The neck and backs of the hands tend to show age much faster than the rest of the body, so treating these areas with your skin creams and SPFs is a helpful way to mitigate that effect," Dr. Devgan says.

10. Keep your mind sharp

I thought that playing brain games contributed to mental sharpness (and they do, though they target very specific cognitive abilities), but your best bet for keeping your mind in tiptop shape for the long haul requires social interaction, learning a new language, and visits to "intellectually invigorating places" like museums and cultural centers, according to Dr. Karen Li, head of Concordia University. Lucky for us, all of this is mostly available for free no matter where you live.

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Financial Steps to Take When Your Aging Parents Move In

Annie Mueller — Thu, 10 Aug 2017 08:00:07 +0000

Long-term elderly care can be prohibitively expensive. Fortunately, there's a long, worldwide history of having a multigenerational household, and moving your aging parents in with you can provide multiple benefits. You know your parents will receive the care and attention they need, and you gain precious time with them.

Making this transition can be complex, though. If you've decided to bring your aging parents to live with you, consider these smart money moves to simplify and support the process. (See also: A Simple Guide to Planning For a Loved One's Long-Term Care)

1. Organize their finances

Since bringing your parents into your home affects your finances, too, you need to have some honest discussions with them about their financial resources, and yours. You need to know what they can handle financially, and what you'll need to take on. Getting their financial information in order is an important first step, so you can assess the combined financial picture together and plan accordingly.

Since financial matters are often stressful, these discussions can be the most delicate part of the transition. Discuss with your parents the importance of simplifying and organizing their finances. Work with your parents to locate and organize all important financial information. Consider purchasing a fireproof safe or renting a safety deposit box for the most important financial and legal documents.

2. Plan for their finances

Once you have all the financial information at hand, you'll need to sit down with your parents to make some decisions. It's often a good idea to set up a meeting with a financial adviser to discuss creating a will and making a plan for how to handle illiquid assets, investments, and any liquid wealth in the most beneficial way possible for your parents.

You also need to discuss options for helping your parents handle their finances in the event that they are not able to do so independently. You (or another adult child) may need to be included as a primary holder on their accounts. (See also: 6 Things You'll Encounter When Taking Over a Loved One's Finances)

Finally, examine the costs and expenses of having your parents move in with you. First consider the initial modifications and supplies needed to set your parents up with comfort and accessibility in your home. Then estimate how much your parents' ongoing monthly living expenses will be, and work together with your parents on the best plan for covering these expenses.

3. Create an independent living space

If both of your parents are moving in with you and at least one of them is still functioning moderately well, they may be able to handle a little more space and separation from you. On the other hand, if your parents need assistance with their daily needs and/or medical care, you'll want to be nearby.

For parents who want more independence, consider the "granny pod" trend. This is a small but separate structure, often placed in the backyard. It can be a tiny home, guest cottage, small prefabricated home, or a converted workshop or garage. The separate building helps you all maintain some privacy and space, but still keeps you close and connected.

If your parents will be in your main house with you, there are many cost-effective options for creating a usable living space for them.

Convert an unused room. An empty dining or living room can become a spacious bedroom.
Close in an outdoor space. That patio, deck, or porch may already have the structural elements in place.
Use the basement. Transform the empty downstairs of your home into a suite for your parents (just be sure that accessibility isn't an issue).
Change your configuration. Perhaps you'll give up your master bed and bath for your parents, but convert the basement into your own luxurious suite.

While some changes may be costly upfront, any improvements and updates you make to your home can add to its long-term value. Keep good records so you can validate the increased value of your house if you decide to sell in the future.

4. Consider accessibility needs

There are several accessibility and safety needs to consider with your aging parents. Will they need a wheelchair ramp for getting in and out of the house? If they will be using stairs, are there adequate, sturdy handrails? (These are an important safety feature for anyone, not just aging parents!) Talk with your parents' medical provider about any other special safety or accessibility concerns.

5. Investigate financing options

Once you know what your parents need, investigate options for financing it. Your parents' insurance may foot all or part of the bill for necessary home modifications for safety or medical reasons. Medicaid and Medicare generally don't cover home modifications, but may provide needed in-home equipment. The Department of Veterans Affairs also covers some home-modification needs.

Beyond insurance, there are some state programs that provide financial assistance for elder-care home modifications and there are grant and loan programs from the Department of Agriculture, as well as from the Department of Housing and Urban Development and the Federal Housing Authority. Finally, many local nonprofit groups provide financial assistance or volunteer labor to help with home modifications for seniors.

If you do have to fork out your own money, you may at least get some relief from the IRS, as some home improvements qualify for tax deductions.

6. Establish a caregiver agreement

If your aging parents will need help with daily activities or will require in-home medical care, consider establishing a formal caregiver agreement. A formal agreement can help you continue to personally afford your parents' care, especially if you need to forego other employment to provide that care.

Without this agreement, it's more difficult to qualify for tax deductions, and your parents may find their Social Security payment lowered. With an agreement, you can set out the formal cost of your care in terms of a fair-market rent and the hourly rate of a caregiver. This protects both you and your parents from a financial loss you don't need to incur.

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This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Ways to Age Well on a Shoestring Budget

Amy Lu — Fri, 28 Oct 2016 09:30:28 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on aging well on a shoestring budget, saving money at the gym, and budgeting when you live in an expensive city.

12 Money Moves to Make the Moment You Decide to Retire

Mikey Rox — Tue, 09 Aug 2016 10:00:14 +0000

You deserve a big pat on the back, a rousing rendition of He's a Jolly Good Fellow, and a fat slice of cake when you decide to retire. You should enjoy it, too, because it's not necessarily all perfect bliss from that day forward. Rather, you have to devise a plan to keep yourself fed, clothed, housed, and healthy until the day you die, and that prospect is perhaps more daunting than the 45 years of solid work you put in.

To help you along the way without having to breathe into a brown paper bag for the rest of your life, here are a few suggestions on what to do with your money when you set a date to punch your final card.

1. Establish Your Income Goals and Needs

Money matters rarely work without a plan in place, and that's exactly what you'll need when you retire. In anticipation of this major life milestone and transition, you'll need to take a hard and honest look at your finances to see where you're at currently, and figure out where you want and need to be. That might mean cutting the proverbial fat from your current budget, or it might mean contributing to your savings at a higher, more rapid rate. Whatever the case, changes will need to be made to set yourself on the right track. Financial expert Steve Anzuoni, of Fairway Financial, details a few practical steps to achieve this.

"First establish your income goals and needs, and then list all your expenses and liabilities; then you need to make sure that your monthly recurring expenses are covered by guaranteed income, not potential income," he says. "Once that is taken care of, it's then a matter of allocating monies to different 'buckets' to account for inflation, future income needs, emergencies, and fun/vacation money."

That last piece of the puzzle is important. Retirees often plan based on their current needs in the current economy. To stay ahead of the curve, it's a good idea to think ahead and plan for those what-if scenarios that pop up from time to time and can, in a worst-case situation, decimate your finances. Inflation and emergencies in particular can bleed you dry if you're not prepared, and now's the time for that consideration.

2. Eliminate Your Consumer Debt

You want to be as financially prepared as possible when retiring, and that means freeing yourself from the grips of consumer debt. The last thing you want to worry about when you settle into retirement are credit card payments, so concentrate now on eliminating them altogether. If you have the extra cash on hand, pay them off. If not, look into ways to reduce the required monthly payments to make them more manageable with the goal of being payment-free by the time you say so long to your coworkers and colleagues. We cover a million and one ways to help pay off your debt here at Wise Bread.

3. Manipulate Your Mortgage

Along with your consumer debt, you should try to pay off your mortgage — if you can swing it. This feat may not be feasible if you've recently purchased a home, but if you've lived at the same residence for the past 20 years or more, you might be able to meet this goal. Otherwise, find ways to reduce the mortgage to make it fit better into your new, tighter budget.

"Owning your home not only means a lot less money going out every month, it means a lot less worry should things get tight," says financial adviser Scott Hanson of Hanson McClain Advisors. "Conversely, if you are unable to pay off your mortgage before you retire — even if you have as little as five to seven years remaining on the note — you might consider working with your lender to lower your interest rate and extend your loan out 15, 20, or even 30 years. Simply put, not only is cash-flow king, but why spend what are likely to be the healthiest years (of your retirement) struggling to pay down a mortgage at the expense of maintaining your pre-retirement standard of living? Money not going out is the same as money coming in."

4. Downsize Your Living Situation to Cut Costs

If you have more space than you realistically need, it's time to downsize. You can (hopefully) take the money from the sale of your home and purchase a new place that better suits your lifestyle, perhaps even in cash if you've tended well to your existing mortgage over the years and you're savvy about your new purchase.

Financial planner Charlie Reading, author of the book The Dream Retirement: How to Secure Your Money and Retire Happy, agrees.

"If you have a house where the mortgage is paid off, an easy way to boost your retirement income is to move to a smaller or a cheaper house," he says. "Releasing this equity and moving into a smaller home can provide you with valuable funds that you can use to generate an income. You also have the option of equity release here, however financially downsizing is likely to be a more astute choice if that is practical."

5. Relocate to a More Affordable Area

Along with downsizing your home, take some time to think about where you want to live and the associated cost of living in that area. If you live in an expensive area now, maybe it's a more sensible to move someplace where you'll get more bang for your limited bucks. Of course, you'll need to be happy wherever you move, so along with the financial factors you'll also want to consider your quality of life. Are there things to do to keep you occupied and social? Is transportation nearby? Is it relatively easy for family and friends to visit? Will you get fast and easy medical attention when you need it? These are all important questions to answer when contemplating a move to a new area.

6. Invest in a Rental Property to Earn Additional Income

I'm an investor in rental properties, and I wholly plan to use those properties to bring in additional income for savings and retirement for as long as the properties make money — and sense. If going this route is a legitimate option for you, I highly recommend it. Just beware of the hidden costs. If you manage the property yourself, like I do, all the income is yours (but don't forget to set aside a decent stash for taxes). If you require assistance, however, like from a management company, you could be looking at fees between 30% and 50% of your net income. There are more affordable options, like through the Evolve Vacation Rental Network, which charges the lowest fees in the industry at just 10%.

Consider this anecdote: Jim and Laurel Whillock invested in a vacation property on the Big Island of Hawaii as a way to earn income in retirement. They purchased a one-bedroom condo on the beach and hired a property manager, who charged a 43% fee, to help with the logistics and operation. During the first six months, the condo was occupied 35% of the time, earning the couple only $6,500. After switching to Evolve, in a 12-month period, the couple booked 260 nights generating rental income of $48,199, an increase of 242%.

In any case, what I'm saying is, do your research before thrusting yourself into the rental-income market; there are other management options out there. The goal is to make money, not lose it — especially when finances are tighter during retirement.

7. Phase Your Retirement Over an Extended Period

Not ready to go all in for retirement? That's perfectly okay. There's no "right" way to retire, and if you need more time to ease into the transition, by all means take it.

"Go down to three days a week and enjoy the benefit of not taking your pension as early, and the growth that comes with it," Reading suggests. "This doesn't have to be your current job — why not start working in a role you have a passion for, even if it doesn't pay you quite as much as your current one does? Who knows, maybe this will become your new purpose, and you won't ever want to stop."

8. Develop a Strategy for Medical Insurance

We're starting to enter into territory that nobody likes talking about, especially those nearing or at retirement age. But ensuring that you have proper medical coverage while also getting all your other end-of-life ducks in a row isn't something you can put aside or overlook. This is reality, however harsh it seems, and these items must be addressed — the earlier, the better.

"Because medical insurance can be very expensive, it may actually prevent you from being able to retire," Hanson warns. I strongly suggest you check into your options before retiring. If you can't afford to purchase medical insurance, you may be forced to find another job until you can apply for Medicare at age 65."

9. Re-evaluate Your Other Insurances for Optimal Protection

While you're assessing your medical insurance situation, it's a good idea to check in with your other insurance plans to make sure you have the kind of coverage you need at this stage, but also to see where you may be able to cut costs — though the latter should never affect your quality of life. Don't reduce coverage you'll need down the road just to save a few bucks in early retirement. To make the right decisions, you may want to enlist the help of an insurance adviser.

"[Insurance advisers] can advise on ways to adjust your insurance profile — around both your home and auto policies," says insurance expert Angi Orbann. "They may be able to find cost savings and they will help you ensure that you are adequately protected as you move into the next phase of your life. An insurance adviser may not be the first person you think of when it comes to your money and retirement, so it's an important tip to remember."

10. Create a Last Will and Testament

Fact: 41% of Boomer Americans don't have a will, according to USA Today — and if you're among them, it can spell big trouble for your estate when you pass.

Licensed funeral director Kelli Hoodman explains.

"Creating a will tells loved ones how one's property should be distributed after one passes away," she says. "Depending on how complex one's estate is, one may want to contact an attorney or simply create a will online. Without a will, one's finances and property are distributed by the state, and they may not land in the hands the deceased would've wanted them to be in."

Don't overlook the funeral planning, either. Your last will and testament isn't just about who gets what. It's also as much about where you'll go when you pass. You should have the final say in that while you're alive and kickin'.

"Expressing final wishes for funeral planning in a will is important, but it should not be the only place they are documented," Hoodman adds. "Funeral planning is best done with a local funeral home or cremation society. Otherwise it may take time for a will to be found, and one's final wishes might not adhered to."

11. Preplan Your Funeral Services

It probably won't be your best day ever, but preplanning your funeral is not only therapeutic, says Hoodman, but it's also fiscally intelligent.

Funeral costs rise each year, and a traditional funeral and burial today can cost over $10,000. Cremation, which has recently become America's preferred method of disposition, is far less expensive at only a couple thousand dollars, depending on which services are selected.

"No matter which choice one makes, inflation and other factors raise the price of cremation, burials, and funerals over time," Hoodman says. "Companies like Neptune Society offer preplanning services that allow retirees to create a legal document that states one's wishes for memorials, cremation, and other matters concerning death care planning. Over the many decades a retiree may live, preplanning now could save them hundreds or thousands of dollars."

12. Designate a Power of Attorney

Lastly, if you want to be in control of your life — and afterlife — choose someone close to you whom you trust implicitly as your Power of Attorney.

A Power of Attorney (POA or attorney-in-fact) makes decisions for a person when that person can no longer make decisions for themselves. For example, if a senior is diagnosed with Alzheimer's, an attorney-in-fact would be legally permitted to make financial and medical decisions in that senior's stead.

"Choosing someone trustworthy is crucial for this role," says Hoodman. "A retiree should ensure that their POA knows their preferences on medical dilemmas, like whether or not to use life support, and their financial information to ensure their money is spent properly."

You don't like being taken advantage of while you're alive, so it's important to ensure that you won't be taken advantage of in death, either.

Have you made any money moves to prepare for retirement?

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Is Long Term Care Insurance Worth It?

Dan Rafter — Tue, 26 Jul 2016 10:30:09 +0000

Worried about how you'd pay for a long stay in a nursing home? These concerns aren't rare. The 2016 Insurance Barometer Study found that 58% of respondents worried they wouldn't have enough money to afford the costs of long-term care.

Fortunately, there is an insurance product that can help ease these concerns: long-term care insurance. It pays for services to help people who need assistance with daily activities, or who require supervision because of a disease such as Alzheimer's. People often use this insurance to cover stays in nursing homes.

The U.S. population is aging. The U.S. Census Bureau said that there were 46.2 million people 65 and older in 2014, or 14.5% of the country's population. These people are the prime target for long-term care insurance. But you may need it sooner if you have reason to believe you'll need such assistance earlier in life.

Is It Worth It?

Should you invest in long-term care insurance? That depends on a host of factors. Do diseases such as Alzheimer's run in your family? Did your parents and their parents die young, or did they live to an old age? Did they require long stays in nursing homes?

Unfortunately, there's no way to predict whether you will need long-term care in your life. You might be healthy today. You might eat well and exercise regularly. This doesn't mean that your health can't suddenly change.

Then there are other financial alternatives to consider. By the time you need long-term care, you might be eligible for the government's Medicaid program, which will pay most of the cost of any stays in critical-care facilities or nursing homes. This program is only open to consumers with few assets. Many senior citizens on fixed-incomes, though, will qualify.

Also, Medicare will often pay for the first 20 days that you spend in a nursing home. From the 21st to the 100th day, Medicare requires that you make a co-payment of $161 a day.

If you do want to invest in long-term care, know that the insurance can be costly. The American Association for Long-Term Care Insurance says that an insurance policy providing $164,000 in immediate coverage will cost a male age 55 in good health an average of $1,060 a year. A single female in good health would pay an average of $1,390 a year for the same coverage, according to the association.

A couple, both age 60 with standard health for that age, would pay an average of $2,710 a year — the combined cost for both members of the couple — for a long-term care insurance policy with $164,000 in immediate coverage.

Better policies will cost significantly more. The association says that a policy providing $164,000 in immediate coverage at age 60 and $365,000 at age 85 would cost a 55-year-old man in good health an average of $2,075 a year. It would cost a 55-year-old female also in good health an average of $2,411 a year.

Long-Term Care Costs Continue to Rise

According to the 2016 Genworth Cost of Care Survey, the cost of long-term care is only getting more expensive. According to the survey, the national median cost of a month's stay in a semiprivate room in a nursing home is $6,844. That figure rises to $7,698 for a month's stay in a private room. The median cost for a stay in an assisted-living facility was $3,628 a month.

Other costs associated with long-term care are staggering, too. The Genworth survey found that the median cost for a month's worth of homemaker services was $3,813 and the median cost of a home health aide was $3,861 a month. The median cost of adult day health care services was $1,473 a month.

The odds are high that you, too, will need to some form of long-term care as you age. According to a 2013 study by the Centers for Disease Control, more than 8.35 million people receive support from the five main types of long-term care services: home health agencies, nursing homes, hospices, residential care communities, and adult day service providers.

You can't predict today whether you will need such care or whether you'll ever need to use a long-term care insurance policy. But for some, the annual investment does provide peace of mind that if you are hit with a huge bill for a long stay in a nursing home, you won't have to bankrupt yourself to pay for it.

Have you considered long-term care insurance?

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

What Is Power of Attorney?

Dan Rafter — Mon, 20 Jun 2016 09:30:26 +0000

Struggling with money issues or big medical decisions can happen to all of us. Aging, illness, or other factors can contribute to the difficulty. You can get help, though, through a legal document known as a power of attorney.

In a power of attorney, you sign a document stating that another person whom you trust, known as the agent or attorney-in-fact, has the power to act on your behalf to make certain decisions. Your power of attorney could limit this person to making only financial decisions on your behalf. But you can make the document broader, giving your agent the power to make a wide variety of decisions, including choices about medical care, or decisions regarding where you live, and when it's time to sell your home.

When You Need One

In most cases, it is elderly people in their retirement years who choose to enact a power of attorney. This is especially true for elderly people who are struggling with memory issues or other illnesses that make it more difficult for them to keep track of their finances.

You might not think you need a power of attorney if you are married. After all, even if you can no longer handle the tasks of paying your bills on time, your spouse can withdraw funds from your joint bank accounts to make sure that your mortgage company, auto-financing company, or utility company are paid on time each month.

But there are other financial decisions that can be complicated even for married couples. For instance, it might make sense to sell your home. But in many states, both spouses must agree to a home sale. If one spouse is incapacitated and unable to make this decision, the other spouse might not be able to put the home on the market.

Also, your spouse will have no legal authority to make decisions regarding accounts or property owned solely by you. A power of attorney, though, can guarantee that important financial or property matters are handled by someone whom you trust.

Different Types of Contracts

There are several different types of power of authority contracts. What is known as a durable power of attorney might be the most powerful. This type of power of attorney remains in effect for your entire lifetime. This gives the agent free reign to manage your accounts on your behalf for as long as you are alive.

Because a durable power of attorney lasts the rest of your life, though, you need to be clear about what you want it to say. If you want your agent, for instance, to only be able to make decisions regarding your home and its sale, spell that out in the power of attorney document. If you want your agent to have broader control over both your finances and your medical decisions, spell that out, too.

A conventional power of attorney goes into effect when the document is signed and ends when that person becomes incapacitated.

You can also create a springing power of attorney. This type goes into effect when a specific event takes place. In most cases, a springing power of attorney will become effective when you become mentally unfit to handle financial, medical, or property decisions.

The challenge often lies in determining when this specific event has actually taken place.

Be Wary

Creating a power of attorney is a big decision, and one that you should only make after meeting with loved ones and legal professionals. Remember, you are signing over your right to make your own financial, property, or medical decisions.

Keep in mind your spouse, too. Your spouse can continue to make decisions on your behalf even after you have signed a power of attorney. But once your spouse becomes incapacitated, the agent you named in your power of attorney will take over.

Deciding who will serve as your agent is the big decision here. You can choose a family member, your spouse, a friend, or another loved one. The key is to find someone you both trust and who is willing and able to take on this responsibility.

Have you considered granting power of attorney? Has someone given you this responsibility?

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: How to Age Well on a Shoestring

Amy Lu — Wed, 11 Feb 2015 20:00:09 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some great articles on how to age well on a shoestring, tools to help you reclaim your time, and a morning checklist for the best day ever.

Don't Let Poor Health Kill Your Retirement Fund

Michael Kling — Fri, 04 Jul 2014 13:00:04 +0000

Poor health can destroy your finances in retirement if you fail to build both a healthy retirement fund and a healthy retirement body.

Research shows that physical and financial health are closely linked. In a 2002 University of Michigan study, married couples with excellent health averaged $500,000 in net worth, about three times that of married couples with poor health who had an average of $164,000. (See also: 10 Easy Ways to Supercharge Your Retirement)

When it comes to costs, many Americans may underestimate how much money they'll spend on health care in their golden years. Over half of the respondents to a Fidelity Investments Retirement Savings Assessment survey say they'll need about $50,000. But Fidelity predicts an average couple will need more than $220,000 over the course of their retirement — just for health care!

Indeed, retirees now spend more on health care than they do on food, and at the present rate, health care will be retirees' largest expense after housing.

So to help you prepare, start thinking hard about the following steps.

Building a Healthy Retirement Budget

Investment broker Fidelity recommends taking these four steps to prepare for health care costs in retirement.

1. Set a Savings Goal

Set an annual savings goal of 10% to 15% or more of your income, including 401(k) plans and IRAs. Consider saving part of any raises, bonuses, or tax refunds and increasing contributions to savings plans by 1% every year.

2. Go on Auto-Pilot

Sign up for automatic savings plans with your financial services company. Use the automatic increase feature in your 401(k) plan if it's offered.

3. Use Health Care Savings Accounts

HSAs, offered through employers, offer a triple tax advantage. Contributions and investment earnings accumulate tax-free and roll over year to year if not spent. Distributions for qualified medical expenses are not subject to federal taxes. (See also: How to Choose a Health Insurance Plan)

4. Understand Medicare Options

Most people qualify for Medicare hospital insurance, or Part A, at age 65 and don't pay for the coverage if they paid Medicare taxes while working, according to Fidelity.

However, you pay monthly premiums for Medicare medical insurance, or Part B, which covers doctor visits and other medical services. Plus, there's no limit on out-of-pocket expenses.

4. Understand Unbundled Vs. Bundled Coverage

Unbundled coverage involves using Medicare Part A and Part B along with Veterans benefits, former employer retiree plans or purchasing supplemental, or Medigap, insurance from a private insurance company. That route may be best if you want to fill in gaps in coverage and keep the original Medicare coverage. You can use any doctor or facility you like but may pay higher premium. The policies don't include prescription coverage so you'll need to buy Medicare Part D to cover prescription drugs.

Bundled coverage is Medicare Advantage or Managed Care plans, privately managed plans that combine Medicare Parts A and B, and supplemental coverage you purchase. They often include prescription coverage and can offer lower premiums or better benefits. Simpler than unbundled coverage, it requires just one ID card.

The disadvantage is that it can limit you to only network providers.

Medicare's website offers a useful tool for comparing supplemental insurance in your state.

Building a Healthy Retirement Body

Maintaining a healthy lifestyle and being informed during your working years is key to your financial fitness in retirement. Here's ten actions to take now to improve your health in the future (some pulled from health care insurer Aetna's excellent website, Plan For Your Health):

1. Know Your Cholesterol

Cholesterol has a big impact on heart health. Healthy cholesterol levels are 200 milligrams per deciliter (mg/dL) or lower for total cholesterol, 100 mg/dL or lower for LDL cholesterol, and 60 mg/dL or higher for HDL (or "good") cholesterol, and 150 mg/dL or lower for triglycerides (fat).

2. Don't Smoke

Smoking raises blood pressure, increases fatty plaque in arteries, and increases chances for heart attacks.

3. Check Your Blood Sugar

Have your blood sugar level tested once a year. High blood sugar levels indicate higher chances of diabetes, which in turn means higher odds for other health problems.

4. Eat Right

Eat high-fiber foods, fruits, vegetables, legumes and whole grains. Apples can decrease the risk of cancer, according to AARP. A handful of nuts a day may help prevent both heart disease and cancer. Beans and lentils are good for your colon, garlic fights off digestive-tract cancers, and curry has ingredients that may offer protection against brain tumors. (See also: Eating at the Intersection of Cheap and Healthy)

5. Exercise Daily

Daily exercise reduces the ill-effects of aging, such as worsening eyesight and less bone density. Even 10 minutes of exercise a day helps, writes James Rouse, a naturopathic physician and host of "Optimum Wellness." The many simple exercise options, he says, include going for walking, dancing, bicycling, playing water volleyball, or jumping on a trampoline.

6. Be Friendly

Stress builds up if you keep your feelings bottled inside. Talk to your friends and family and ask for support. If you don't have a good support system, work to develop one to have someone to talk to when you're upset.

7. Relieve Pressure

To prevent or manage high blood pressure, use less salt, limit alcohol and caffeine, quit smoking, mind your cholesterol, and exercise daily. Besides making you unhappy, too much stress can increase your heart rate and raise your blood pressure. Try meditation, deep breathing, muscle relaxation, listening to relaxing music, or picturing pleasant scenes.

8. Take Health Tests

Women should have a Pap smear annually until age 65, a mammogram annually starting at age 50, a bone density test to guard against bone thinning, advises Dr. Mehmet Oz, host of "The Dr. Oz Show."

Men should have a prostate-specific antigen, or PSA, test at age 50 for a baseline reading, followed by yearly testing. Both men and women should have a colonoscopy at age 50, then once every 10 years.

9. Watch Your Weight

Over 60% of American adults are overweight and a third are obese. An average woman of 5 feet 4 inches is obese at 175 pounds. An average man of 5 feet 9 inches is obese at 196 pounds, says Dr. Oz. Measure your waist above your hip bone and below your rib cage. It should be less than half your height.

10. Beware the Sun

Use sunscreen and reapply it every two hours when you're in the sun, Dr. Oz advises. Men should remember their ears and scalp where they're more prone to skin cancer than women. Wear sunglasses in bright sun to help ward of failing eyesight in latter years.

How are you planning for health care costs in retirement? Please share in comments!

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This article is from Michael Kling of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: