Retirement http://www.wisebread.com/taxonomy/term/417/all en-US 8 Critical 401(k) Questions You Need to Ask Your Employer http://www.wisebread.com/8-critical-401k-questions-you-need-to-ask-your-employer <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-critical-401k-questions-you-need-to-ask-your-employer" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/401k_retirement_plan.jpg" alt="401(k) Retirement Plan" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The 401(k) plan is one of the most popular ways for workers to build up their nest eggs for retirement. As of June 2017, 55 million Americans held an estimated $5.1 trillion in assets in 401(k) plans. Whether you're already enrolled or planning to enroll in your employer-sponsored retirement plan, there are several details that you should find out to make the most of it. Let's review some key 401(k) questions you need to ask your employer. (See also: <a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make?ref=seealso" target="_blank">5 Dumb 401(k) Mistakes Smart People Make</a>)</p> <h2>1. When am I eligible to make contributions?</h2> <p>Different plans have different rules. You shouldn't assume that the same rules from your previous workplace retirement savings plan will apply to that of your current job. Some plans may require you to wait at least six to 12 months before you can contribute to your account, while others may allow you to do so right away. In a review of 4.4 million 401(k) plans in 2016, Vanguard found 67 percent of plans offered immediate eligibility for employee contributions.</p> <h2>2. Do you offer a company match?</h2> <p>America is experiencing very low unemployment levels. In October 2017, the Bureau of Labor Statistics reported the national unemployment rate stood at 4.1 percent, with some states reaching even lower rates (North Dakota and Colorado recorded 2.5 percent and 2.7 percent, respectively, that same month). Looking to retain and attract talent, more and more employers match employee contributions to their retirement accounts. In Vanguard's <em>How America Saves 2017</em> report, 94 percent of employers offered matching 401(k) contributions in 2016, up from 91 percent in 2013. After you find out how much of a match your workplace offers, be sure to contribute at least up to that amount. If you don't, you'll be leaving free money on the table.</p> <h2>3. What type of formula do you use for matching contributions?</h2> <p>In 2016, there were over 200 different ways in which employers matched their employee contributions, according to Vanguard. By far the most common formula (70 percent of plans) is 50 cents for every dollar up to 6 percent of your pay. Assuming that you make $50,000, this would mean that your employer would contribute up to $1,500 if you were to contribute $3,000 to your 401(k).</p> <p>Here are the next two most common types of matching formulas found in the study:</p> <ul> <li> <p>$1.00 per dollar on first 3 percent of pay, then $0.50 per dollar on next 2 percent of pay (22 percent of plans).</p> </li> <li> <p>A dollar cap, often set at $2,000 (5 percent of plans).</p> </li> </ul> <p>It's important to find out the matching formula used by your employer so that you know how much you need to contribute to your plan to maximize that match. In 2016, 44 percent of surveyed plans required a 6 to 6.99 percent employee contribution for a maximum employer match.</p> <h2>4. When do employer contributions become fully vested?</h2> <p>While all of your 401(k) contributions become fully vested immediately, funds contributed by your employer may take longer to actually become yours. Knowing the applicable vesting schedule is essential to know how much of your 401(k) you'd keep if you were to separate from your employer at any point in time.</p> <p>Depending on your employer, matching contributions may be immediately yours (cliff vesting) or gradually over a period of time (graded vesting). In the Vanguard study, 47 percent of plans granted immediate ownership of employer contributions, 30 percent of plans gradually granted ownership over a five- to six-year period, and 10 percent had a three-year cliff vesting waiting period. (See also: <a href="http://www.wisebread.com/how-to-tell-if-your-401k-is-a-good-or-a-bad-one?ref=seealso" target="_blank">How to Tell if Your 401(k) Is a Good or a Bad One</a>)</p> <h2>5. Can I take hardship withdrawals?</h2> <p>In a perfect world, you would leave your 401(k) funds alone until retirement. However, life happens and it may throw you a curve ball leaving you in a major cash crunch. Some plans offer holders the ability to withdraw money early without the 10 percent IRS penalty due to hardship exemptions, such as certain medical expenses, avoiding foreclosure, and funeral and burial expenses.</p> <p>Some plans may even allow you to take hardship withdrawals for less gloomy situations, such as buying your first home and paying for college expenses for yourself, your spouse, or your children. Eighty-four percent of plans offered hardship withdrawals in the Vanguard study.</p> <h2>6. What are my investment options?</h2> <p>In 2016, 96 percent of surveyed 401(k) plans designated a target-date fund as the default investment option. There are many reasons, including high expense ratios and variable return rates, why you should look beyond target-date funds and consider all funds available in your 401(k).</p> <p>On average, 401(k) plans offered 17.9 funds to plan holders in 2016. Over recent years, more and more plans are offering a suite of low-cost index funds covering domestic equities, foreign equities, U.S. taxable bonds, and cash. In 2016, 57 percent of plans offered such an index &quot;core&quot; of funds covering at least these four asset types. Take a good look at what your 401(k) has to offer so that you can select the best funds for your unique financial goals. (See also: <a href="http://www.wisebread.com/bookmark-this-a-step-by-step-guide-to-choosing-401k-investments?ref=seealso" target="_blank">Bookmark This: A Step-by-Step Guide to Choosing 401(k) Investments</a>)</p> <h2>7. Do you offer financial advice?</h2> <p>Plans may offer a wide variety of financial advice, ranging from access to a financial adviser a few times out of the year to fully-fledged management of your investments. These perks often come at a cost ranging from 0.25 to 1 percent of your account balance. Still, depending on your financial situation, getting professional advice may be worth every penny to maximize your nest egg or handle tricky tax scenarios.</p> <p>Besides checking for a human financial adviser, inquire about whether or not your plan offers you robo-advisers. Often charging much lower fees than human advisers, robo-advisers can offer valuable services, including automatic portfolio rebalancing and tax-loss harvesting (selling securities that have experienced a loss to offset taxes on both gains and income). (See also: <a href="http://www.wisebread.com/9-questions-you-should-ask-before-hiring-a-robo-adviser?ref=seealso" target="_blank">9 Questions You Should Ask Before Hiring a Robo-Adviser</a>)</p> <h2>8. Can I make Roth contributions?</h2> <p>If you are just starting your career, have a large upside income potential, or are expecting a big salary bump in the next few years, having the ability to make after-tax contributions to your nest egg is important. Under these scenarios, taking the tax hit early in your retirement account would make sense because you would be at a much lower tax rate now than in the future. This is why 65 percent of Vanguard 401(k) plans offered Roth 401(k) contributions in 2016. For some plan holders, a Roth 401(k) is a great way to grow contributions tax-free forever.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/8-critical-401k-questions-you-need-to-ask-your-employer">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-making-all-the-right-moves-for-retirement">8 Signs You&#039;re Making All the Right Moves for Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/three-of-the-toughest-decisions-youll-face-in-retirement">Three of the Toughest Decisions You&#039;ll Face in Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-traps-to-avoid-with-your-401k">7 Traps to Avoid With Your 401(k)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-face-4-ugly-truths-about-retirement-planning">How to Face 4 Ugly Truths About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-inventor-of-the-401k-has-second-thoughts-about-your-retirement-plan-now-what">The Inventor of the 401K Has Second Thoughts About Your Retirement Plan — Now What?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) contributions employer match financial advice hardship withdrawals IRA questions vesting period work Tue, 12 Dec 2017 09:30:15 +0000 Damian Davila 2069139 at http://www.wisebread.com How to Plan for a Forced Early Retirement http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-plan-for-a-forced-early-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mature_businesswoman_working_in_her_home_office.jpg" alt="Mature Businesswoman Working In Her Home Office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Every working adult dreams of the day they can retire and take it easy. But for some, retirement is forced upon them sooner than expected. When this happens, a world of financial stress can follow.</p> <p>LIMRA Secure Retirement Institute found that 51 percent of workers retire between ages 61 and 65, while 18 percent retire even earlier than that. It may not have been in your plans to retire so soon, but life doesn't always go accordingly &mdash; things like declining health or caregiving for a loved one can force people to leave the workforce earlier than they anticipated.</p> <p>Retirement experts advise that in the face of this new trend, your retirement plan should include early retirement options and safeguards. Below are six things you can begin doing now to prepare for an unexpected early retirement.</p> <h2>1. Start planning early</h2> <p>Retiring just five years early &mdash; at age 60 versus 65 &mdash; can significantly impact the amount of income you may need to retire comfortably. One common retirement rule of thumb that can help you roughly determine how much you should save is the <em>four percent rule</em>.</p> <p>Financial experts believe you can safely withdraw about $4,000 a year per $100,000 of savings during retirement, and that would last you approximately 33 years. So, if your living expenses are $40,000 a year, you'd need to save $1 million. This simple rule does not account for inflation or other sources of income such as Social Security benefits, but experts believe it&rsquo;s a good baseline for gauging your retirement needs. (See also: <a href="http://www.wisebread.com/4-retirement-rules-of-thumb-that-actually-work?ref=seealso" target="_blank">4 Retirement &quot;Rules of Thumb&quot; That Actually Work</a>)</p> <p>Bumping up what you contribute to your retirement fund, even by just a few dollars a month, along with lowering your cost of living is a great way to prepare yourself and your family in case you have to retire prematurely.</p> <h2>2. Plan for inflation</h2> <p>While the four percent rule is a great place to start, if you know that early retirement is highly likely for you, you need to be more aggressive. Fidelity advises that your goal should be to save at least six times your current annual salary by the time you are 50, and 10 times your income by the time you are 67. If you are not near these targets, it&rsquo;s time to rearrange some things, rein in your spending, and begin aggressively saving.</p> <p>Another pitfall of retirement many people forget to plan for is inflation. Retirement investments have failed to keep pace with our aging population, Social Security cuts, and hedge against the investment risks brought on by the shift from traditional pensions to individual savings.</p> <p>When you retire, the world will be a more expensive place than it was while you were saving. You must understand and plan for the fact that $10 today will not buy the same thing in 2035. (See also: <a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation?ref=seealso" target="_blank">4 Ways to Protect Your Retirement From Inflation</a>)</p> <h2>3. Don&rsquo;t take Social Security early</h2> <p>In 2014, LIMRA found that 57 percent of men and 64 percent of women took their Social Security benefits early. But since monthly benefits rise five to eight percent annually between ages 62 and 70, the longer you can wait, the better off you'll be. For example, if your full retirement age is 66, but you begin collecting benefits early at 62, your benefit will be reduced by about 30 percent.</p> <p>In years past, once you hit 65, you were eligible for full Social Security benefits and could retire and receive a monthly check from the government. However, that is no longer the case &mdash; especially for younger workers who must put in more years to reach their full retirement age. Experts agree that you should only take your benefits early if you absolutely need to. Proper planning can prevent this from being your only option. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits?ref=seealso" target="_blank">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a>)</p> <h2>4. Consider a partial retirement option</h2> <p>&quot;Partial retirement&quot; simply means keeping a job on a part-time basis as a means to help stretch your retirement savings. By remaining in the workforce for a little while longer, you can defer retirement funds &mdash; such as Social Security, pensions, and even savings &mdash; until you decide to fully retire.</p> <p>Some places, such as government agencies, offer phased retirement plans. These plans allow you to supplement your income by working part time while still contributing to your retirement fund and allowing you to keep a portion of your benefit package. It&rsquo;s important to begin researching these things and understanding your options while you are able bodied. (See also: <a href="http://www.wisebread.com/4-reasons-you-might-have-a-phased-retirement?ref=seealso" target="_blank">4 Reasons You Might Have a &quot;Phased&quot; Retirement</a>)</p> <h2>5. Find a side gig</h2> <p>If your company does not offer a partial or phased retirement option, side gigs are a great way to supplement your income and help tide you over until you reach full retirement age. And while most side gigs don&rsquo;t come with benefits, you do get to set your own hours and work as you are able.</p> <p>Now is the time to look into different side or part time jobs that fit your ability, skill set, and situation. What interests and hobbies do you have that could become profitable? Write them down and research ways you can make money doing those things. You may also want to research jobs you could do from home that are not too physically demanding.</p> <p>Side gigs and part time jobs can also be good for your health. A 2016 Oregon State University study found that those who retire early die sooner than those who work beyond age 65. (See also: <a href="http://www.wisebread.com/9-easy-ways-retirees-can-earn-extra-income?ref=seealso" target="_blank">9 Easy Ways Retirees Can Earn Extra Income</a>)</p> <h2>6. Stick to a budget and pay off debt early</h2> <p>Surviving in retirement is not only dependent on how much you save, but also how much you spend. Most people have to scale back a bit during retirement due to a reduction in income. Scaling back after you retire is a tough thing to do. You have more free time to travel, indulge in hobbies, and spoil the grandkids rotten &mdash; all of which can quickly shrink your nest egg.</p> <p>Start now by creating and sticking to a conservative budget. The extra money you save should go into your retirement fund or toward paying down debt. Scale back on expenses where you can and consider downsizing before it's time to retire for good. Establishing disciplined spending habits now will carry over and benefit you later &mdash; when it really counts.</p> <p>A great way to reduce your overhead and free up some cash is to pay down your debt as quickly as possible and to get rid of your mortgage before you retire. The less debt you have, the more spending money you have. (See also: <a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0?ref=seealso" target="_blank">6 Ways You Can Cut Costs Right Before You Retire</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-you-might-have-a-phased-retirement">4 Reasons You Might Have a &quot;Phased&quot; Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">7 Roadblocks to Retirement (And How to Clear Them)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-handle-a-forced-early-retirement">5 Ways to Handle a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-actions-women-can-take-right-now-to-get-their-retirement-on-track">5 Actions Women Can Take Right Now to Get Their Retirement On Track</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement benefits budgeting early retirement extra income financial planning forced retirement inflation phased retirement saving money social security Mon, 11 Dec 2017 09:30:10 +0000 Denise Hill 2068119 at http://www.wisebread.com How Divorce Can Impact Your Social Security Payments http://www.wisebread.com/how-divorce-can-impact-your-social-security-payments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-divorce-can-impact-your-social-security-payments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/wire_wrapped_wedding_figurines.jpg" alt="Wire wrapped wedding figurines" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Divorce can have long-reaching financial consequences that can make it harder to ensure a stable retirement for yourself. The good news is that the Social Security Administration continues to acknowledge your relationship with your former spouse, even if you have striven to forget about it. Divorced partners may potentially collect spousal benefits based on the work records of their ex-spouses. This can be a boon for retiring divorcées &mdash; especially those who earned less than their spouses.</p> <p>Here's what you need to know about how your benefits might be affected by a former marriage.</p> <h2>Social Security's rules for spousal benefits for divorced couples</h2> <p>Not every divorced beneficiary is eligible for spousal benefits based upon their ex-spouse's work record. The Social Security Administration has several rules in place that you must meet in order to be eligible.</p> <h3>Rule 1</h3> <p>The marriage must have lasted for at least 10 years. This is bad news for Kris Humphries (whose marriage to Kim Kardashian famously lasted only 72 days), but it does ensure that any long-term marriages will offer a modicum of financial protection to each spouse.</p> <h3>Rule 2</h3> <p>To collect spousal benefits based on your ex's work record, you have to remain single post-divorce. However, if you do end up remarrying and your subsequent marriage ends in death, divorce, or annulment, you might still be eligible for benefits based on your original ex-spouse's work record.</p> <h3>Rule 3</h3> <p>If you've remained single and your ex got remarried, the spousal benefits you collect will not affect the benefits that your ex and his or her new spouse are entitled to receive.</p> <h3>Rule 4</h3> <p>Even if your ex has not yet applied for benefits, you may collect spousal benefits based on his or her record. You just have to meet two requirements to collect these benefits:</p> <ol> <li> <p>Your ex-spouse must qualify for his or her own retirement benefits. That means he or she must have reached at least age 62 (the earliest age to collect benefits) and be eligible for benefits based on his or her own work record.</p> </li> <li> <p>You must have been divorced for at least two years before the date of your filing for spousal benefits.</p> </li> </ol> <h3>Rule 5</h3> <p>You may only collect divorced spousal benefits if you have reached age 62.</p> <h3>Rule 6</h3> <p>If you collect spousal benefits before reaching your full retirement age, you will receive the spousal benefit plus your own retirement benefit, minus a reduction amount. Both benefits will be reduced based on the number of months you have to go until your full retirement age.</p> <h2>Calculating spousal benefits</h2> <p>The spousal benefit can make a financial difference for divorcées who earned less than their exes. However, because of the way that spousal benefits are calculated, individuals who earned about the same amount as their spouses will see very little benefit &mdash; or possibly none at all. That's why it's important to understand exactly how spousal benefits are calculated.</p> <p>It all starts with a number that Social Security, in its infinite wisdom, refers to as the Primary Insurance Amount, or PIA. The PIA is the full amount of money to which you are entitled as of your full retirement age. Your PIA is calculated using the average amount of money you earned monthly during your 35 top earning years.</p> <p>Your spousal benefit is calculated using your PIA and your spouse's PIA, using the following formula:</p> <p style="margin-left: 40px;">50% of Spouse's PIA - Your PIA = Your Spousal Benefit</p> <p>For example, Charlotte and Ingram divorced several years ago. Charlotte was the breadwinner for most of their marriage, and her PIA is $1,800. Ingram's PIA is $850. Let's look at what they'd each potentially receive as spousal benefits:</p> <p style="margin-left: 40px;">50% of Charlotte's PIA - Ingram's PIA = Ingram's Spousal Benefit</p> <p style="margin-left: 40px;">(50% of $1,800) - $850 = $50</p> <p>Ingram's spousal benefit will be $50.</p> <p style="margin-left: 40px;">50% of Ingram's PIA - Charlotte's PIA = Charlotte's Spousal Benefit</p> <p style="margin-left: 40px;">(50% of $850) - $1,800 = -$1,375</p> <p>Charlotte's spousal benefit will be treated as $0.</p> <p>Since Charlotte earned so much more than her husband, she will not be eligible for spousal benefits based on his work record. (This is true whether they remain married or get divorced.)</p> <p>As for Ingram, $50 does not seem like much, but this spousal benefit will be added to his retirement benefit. This means he will have a monthly benefit of $900 (his PIA of $850 + his spousal benefit of $50), provided he waits until his full retirement age to take benefits.</p> <h2>The importance of timing</h2> <p>The longer you wait for Social Security benefits, the more you will receive &mdash; to the tune of nearly 8 percent per year between age 62 and age 70. This is also true for divorcées hoping to receive spousal benefits, although there is a point of diminishing returns when it comes to spousal benefits.</p> <p>Let's look at an example:</p> <p>Mina and Nicholas divorced after 25 years of marriage. Nicholas is eligible for a PIA of $2,400 as of his full retirement age, and Mina is eligible for a PIA of $1,000 at her full retirement age. Since Nicholas has a much higher PIA than Mina, he will not be eligible for spousal benefits. Mina's spousal benefits can be calculated as follows:</p> <p style="margin-left: 40px;">50% of Nicholas's PIA - Mina's PIA = Mina's Spousal Benefits</p> <p style="margin-left: 40px;">(50% of $2,400) - $1,000 = $200</p> <p>Mina's spousal benefit will be $200.</p> <p>However, when Mina chooses to take her benefits can affect just how much she will receive. Specifically, if she applies for her benefits before reaching her full retirement age, both her PIA and her spousal benefits will be reduced based on the number of months she has to go until her full retirement age.</p> <p>If she applies for her benefits after reaching her full retirement age, however, her PIA will be increased by what's known as delayed retirement credits. But those delayed retirement credits can nullify the spousal benefit, however, because she will receive either the PIA plus delayed retirement credits or the PIA plus spousal benefit &mdash; whichever one is greater.</p> <p>Let's say Mina's full retirement age is 67. Here are three of her timing options:</p> <h3>Mina's Option 1</h3> <p>She files for benefits at age 62, as soon as she is eligible for them. This means she'll be taking benefits 60 months before her full retirement age, which means her PIA will be reduced by 30 percent and her spousal benefit will be reduced by 32.5 percent. Mina's benefit will be calculated using the following formula:</p> <p style="margin-left: 40px;">(PIA - reduction amount) + (Spousal Benefit - reduction amount) = Total benefit before Full Retirement Age</p> <p style="margin-left: 40px;">(Mina's PIA - 30%) + (Mina's Spousal Benefit - 32.5%) = Mina's Benefit at 62</p> <p style="margin-left: 40px;">($1,000 - $300) + ($200 - $65) = $835</p> <p>Mina will receive a monthly benefit of $835 if she files at age 62.</p> <h3>Mina's Option 2</h3> <p>She waits to file for her benefits until she reaches her full retirement age. Mina will receive her PIA of $1,000, plus her spousal benefit of $200, for a total monthly benefit of $1,200.</p> <h3>Mina's Option 3</h3> <p>She waits to file for her benefits until she turns 70. Since her full retirement age is 67, waiting until age 70 will earn Mina an additional 124 percent in delayed retirement credits. Mina will receive her PIA of $1,000, plus her delayed retirement credit of $240, for a total monthly benefit of $1,240. Since her PIA plus delayed retirement credit is greater than her PIA plus spousal benefit (which would be $1,200), she will not receive her spousal benefit if she waits to file for benefits until age 70.</p> <h2>Social Security ever after</h2> <p>Understanding just how your Social Security benefits might be affected by your divorce is an important part of retirement planning. Make sure you know exactly what you are entitled to so you don't miss out on money that can help make your retirement more comfortable.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/how-divorce-can-impact-your-social-security-payments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them">5 Retirement Struggles Nobody Talks About — And How to Beat Them</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">7 Roadblocks to Retirement (And How to Clear Them)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-american-cities-where-you-can-retire-on-just-social-security">5 American Cities Where You Can Retire On Just Social Security</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-what-happens-to-a-mortgage-in-a-divorce">Here&#039;s What Happens to a Mortgage in a Divorce</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement calculations divorce marriage pia retirement benefits social security spousal benefits Wed, 06 Dec 2017 10:00:07 +0000 Emily Guy Birken 2066565 at http://www.wisebread.com 7 Smart Reasons to Retire Abroad http://www.wisebread.com/7-smart-reasons-to-retire-abroad <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-smart-reasons-to-retire-abroad" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_couple_walking_along_coastal_path.jpg" alt="Senior Couple Walking Along Coastal Path" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For some people retirement is a time to slow down, take stock, and simply enjoy not having to suffer the nine-to-five grind every day. For others it's an opportunity to fulfill long held ambitions and head overseas on a great adventure. If you're caught in two minds about what sort of life you want when you wave goodbye to your work commitments, here are seven reasons to retire abroad. (See also: <a href="http://www.wisebread.com/9-things-to-know-before-retiring-abroad?ref=seealso" target="_blank">9 Things to Know Before Retiring Abroad</a>)</p> <h2>1. Reduced cost of living</h2> <p>The U.S. is ranked by Numbeo.com as one of the top 25 most expensive countries in the world in terms of cost of living. That means there is a huge number of alternative countries where you could potentially reduce your living costs, and in many instances quite drastically. A 2015 report by the U.S. Government Accountability Office says that &quot;most households approaching retirement have low savings,&quot; meaning that many Americans could struggle in retirement.</p> <p>Perhaps you're among those concerned about the level of your savings as you head into retirement. But even if you're not, moving abroad to a country with a lower cost of living could be a good way to make your savings stretch. For as little as $1,000 a month you could afford a comfortable retirement in a number of exciting countries. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <h2>2. Higher standard of living</h2> <p>Along with a decrease in expenses, moving abroad could also bring you a higher standard of living than you'd achieve by staying in the U.S. Perhaps you dream of living by the beach, having help around the house, pursuing a pricey hobby, or being able to afford private nursing as you grow older. These may not necessarily be things you'd be able to afford at home, but could well be within your reach by moving abroad.</p> <p>Getting more for less is one of the main reasons many retirees decide to take the plunge and emigrate. Depending on the country you choose, things you might otherwise consider to be luxuries could become part of your everyday life. (See also: <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries?ref=seealso" target="_blank">Retire for Half the Cost in These 5 Countries</a>)</p> <p>As an example, I'm currently living in Koh Samui, Thailand. Just the other day I spent $10 on a wonderful one-hour massage on the beach and I had a delicious organic meal at a beautiful yoga retreat for just $11. These types of experiences would have cost me a lot more in the U.S.</p> <h2>3. Better weather</h2> <p>A driving factor for a lot of retirees who decide to settle abroad is the promise of better weather in other countries. For many, people a cold climate and dreary weather are harder to cope with as they get older. There are plenty of places with tropical climates where you can expect blue skies and consistent heat, regardless of the month.</p> <p>Being able to say goodbye to long, hard winters and swap heavy overcoats for shorts and T-shirts is a fantasy that appeals to many of us. More sunshine doesn't just mean a permanent tan; it can also have a positive effect on your quality of life by allowing you to do more outdoor activities throughout the year. (See also: <a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in?ref=seealso" target="_blank">How to Choose the Perfect Country to Retire In</a>)</p> <h2>4. Cheaper health care</h2> <p>As we get older, the price and quality of medical services available to us naturally becomes a bigger concern. The cost of health care in the U.S. can be so expensive, it can drive you into medical debt. Many overseas retirement hot spots have excellent, affordable health care systems that are easily accessible. There are various options for how to pay for health care when you're abroad, and, depending on your circumstances, each has benefits and drawbacks.</p> <p>An international medical insurance policy is often the safest bet, as it provides comprehensive international coverage. This is ideal if you plan to travel. However, be aware that these policies often don't include treatments back in the U.S. so it's unlikely you'll be covered during visits home. Single country medical policies are available for if you're planning on staying solely in your chosen country and not traveling abroad.</p> <h2>5. To avoid regrets</h2> <p>Nobody wants to look back on their life and have regrets over the things they wish they had done, but never managed to. As a retiree you've most likely worked hard over the course of your career and potentially even sacrificed some of the aspirations that you had when you were younger.</p> <p>It's never too late to build the life of your dreams, and rest assured you won't be alone in heading overseas to do just that. Don't let fear of the unknown stop you from fulfilling those objectives in your golden years. (See also: <a href="http://www.wisebread.com/6-ways-travel-in-retirement-keeps-you-young?ref=seealso" target="_blank">6 Ways Travel in Retirement Keeps You Young</a>)</p> <h2>6. To slow down the aging process</h2> <p>Retirement abroad is the perfect time to welcome new challenges and take advantage of the exciting opportunities that come your way. The Alzheimer's Association suggests that mental stimulation can help stave off mental decline associated with aging and help build new brain cells in the process. Learning about a new culture, exposing yourself to different experiences, and taking up a new language are all great ways to exercise the brain. (See also: <a href="http://www.wisebread.com/5-ways-science-says-travel-is-good-for-your-health?ref=seealso" target="_blank">5 Ways Science Says Travel is Good For Your Health</a>)</p> <h2>7. For the adventure</h2> <p>No one knows exactly how retiring abroad will turn out, but one thing is for sure: It will be a great adventure. It will give you the opportunity to start afresh and live the life that you've always dreamed of. With all of the free time you'll have, the opportunities to travel, explore, and meet new people from a new culture are endless.</p> <p>Experience the different cuisine, take in unfamiliar scenery, and welcome the chances that arise with open arms. You might find your entire outlook on life changed, your opinions challenged, and preconceptions dashed. Retiring abroad could be the best thing you ever do. (See also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-smart-reasons-to-retire-abroad&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Smart%2520Reasons%2520to%2520Retire%2520Abroad.jpg&amp;description=7%20Smart%20Reasons%20to%20Retire%20Abroad"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Smart%20Reasons%20to%20Retire%20Abroad.jpg" alt="7 Smart Reasons to Retire Abroad" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/7-smart-reasons-to-retire-abroad">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month">5 Countries Where You Can Retire for $1,000 a Month</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care">4 Affordable Retirement Spots With World-Class Health Care</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries">Retire for Half the Cost in These 5 Countries</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-make-a-snowbird-retirement-affordable">6 Ways to Make a Snowbird Retirement Affordable</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel affordable retirement cost of living expat longevity retire abroad where to retire Tue, 05 Dec 2017 09:30:10 +0000 Nick Wharton 2066566 at http://www.wisebread.com 8 Signs You're Making All the Right Moves for Retirement http://www.wisebread.com/8-signs-youre-making-all-the-right-moves-for-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-signs-youre-making-all-the-right-moves-for-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggybank_with_glasses.jpg" alt="Piggy bank with glasses" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The 2017 Retirement Confidence Survey from the Employee Benefit Research Institute made a disheartening discovery; only six in 10 U.S. workers feel confident that they'll be able to retire comfortably. That means 40 percent think they won't.</p> <p>That's grim news. But you don't have to fall into this group if you're making the right financial moves to prepare for your after-work years.</p> <p>It can be tricky to know for sure how confident you should feel about your nest egg, but some key signs can indicate that you're on your way to building a happy and healthy retirement.</p> <h2>1. You've worked out the kind of retirement you want</h2> <p>The best way to prepare for retirement? You have to plan for it. This means knowing how you want to spend your after-work years. After all, if you plan on traveling the globe after retiring, you'll need plenty of money. If you instead plan to spend more time visiting your grandchildren, reading, or playing golf, you might not need to save quite as much.</p> <p>The key is to determine what kind of retirement you want long before it arrives. That way, you can financially plan for it. And if you're in a relationship, remember that both you and your partner have to agree, and prepare for, the retirement lifestyle that suits you both. (See also: <a href="http://www.wisebread.com/how-to-find-your-new-identity-after-retirement?ref=seealso" target="_blank">How to Find Your New Identity After Retirement</a>)</p> <h2>2. You've set a retirement age</h2> <p>Do you know when you want to retire? You should. That decision can have a huge impact on your finances once you leave the working world.</p> <p>If you were born between 1943 and 1954, your full retirement age is 66. If you were born after 1959, your full retirement age is 67. You can start claiming Social Security benefits once you turn 62. But if you wait until you hit full retirement age &mdash; or beyond &mdash; the money you receive each month will be far higher. In fact, if you start claiming your Social Security benefits at 62, your monthly payment will be lowered by 30 percent compared to how much you'd get at full retirement age.</p> <p>And if you can hang on until age 70, you'll collect a monthly benefit that is 132 percent of the monthly amount you would have received if you started claiming Social Security at full retirement age.</p> <p>There's nothing wrong with claiming your benefits early, if you've planned for this. But make sure you know how much money you'll need before retiring early. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits?ref=seealso" target="_blank">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a>)</p> <h2>3. You've made a retirement budget</h2> <p>Before you hit retirement age, it's important to determine how much money you expect to spend and receive each month once that steady paycheck has disappeared. This means it's time to create a monthly retirement budget.</p> <p>For income, you can include any pensions, Social Security payments, disability payments, rental income, or annuity income you plan on receiving. You can also include the amount of money you expect to draw from your retirement savings. For expenses, include everything that you'll spend money on each month, including groceries, eating out, mortgage, auto payments, health care expenses, and utility bills.</p> <p>Once you know how much you'll be spending and how much you'll be earning in retirement, you can better prepare for it. (See also: <a href="http://www.wisebread.com/heres-how-you-should-budget-your-social-security-checks?ref=seealso" target="_blank">Here's How You Should Budget Your Social Security Checks</a>)</p> <h2>4. You've paid off your debts</h2> <p>The best way to increase the odds of a happy retirement is entering your post-work years without any debt. That means paying off your credit cards, paying off your mortgage, and making sure you don't owe any money on your car once you've retired.</p> <p>Paying off debt isn't easy. It's why so many of us are struggling under mountains of credit card debt. Before your retirement hits, though, start funneling money toward your debt. The more you pay off, the less financial stress you'll face in retirement. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a>)</p> <h2>5. You've maximized your retirement savings contributions</h2> <p>You should be contributing to an IRA, 401(k) plan, or a combination of both. But as retirement gets closer, make sure you are contributing the maximum amount to these retirement savings vehicles. Doing so will leave you with the greatest financial cushion for retirement.</p> <p>It might seem like a financial sacrifice to devote, say, 15 percent of your regular paycheck to a 401(k) account. But by saving that much, as opposed to 5 percent or 10 percent, you can dramatically increase the amount of money you'll have when retirement arrives. (See also: <a href="http://www.wisebread.com/10-signs-you-arent-saving-enough-for-retirement?ref=seealso" target="_blank">10 Signs You Aren't Saving Enough for Retirement</a>)</p> <h2>6. You're playing catch-up</h2> <p>Once you hit your 50th birthday, you can contribute even more money each year to your 401(k) plan or IRAs. Take advantage of this benefit to provide a late-in-life boost to your retirement savings.</p> <p>For the 2017 tax year, you are allowed to contribute up to a maximum of $18,000 in a 401(k) plan. But if you're 50 or older, you can make what are known as catch-up contributions and contribute an extra $6,000 &mdash; meaning that you can put a total of $24,000 into your 401(k) this year. For the 2018 tax year, 401(k) contribution limits will be raised to $18,500, which means those age 50 or older can contribute up to a total of $24,500 per year. (See also: <a href="http://www.wisebread.com/6-ways-meeting-the-2018-401k-contribution-limits-will-brighten-your-future?ref=seealso" target="_blank">6 Ways Meeting the 2018 401(k) Contribution Limits Will Brighten Your Future</a>)</p> <p>Traditional and Roth IRAs also have catch-up policies for investors 50 or older. For the 2017 tax year, you can contribute up to $5,500 in either form of IRA. But if you are 50 older, you can contribute an additional $1,000, meaning that you can save up to $6,500 this year in a Roth or traditional IRA. This will be remaining the same in the 2018 tax year.</p> <h2>7. You've prioritized your spending &mdash; even when it comes to your kids</h2> <p>It's not easy telling your kids no, even when both they and you are adults. But when it comes to saving for retirement, you might have to do just this.</p> <p>You might want to help your children pay for their college tuition. And hopefully, you've already saved for this. But if you didn't, you shouldn't be putting off saving for retirement to help your adult children pay for college.</p> <p>Your children have other options when it comes to college: They can find a less expensive school, attend community college for two years, or apply for loans and grants. If you can't afford to save for both retirement and your children's college tuition, you absolutely must put saving for retirement first.</p> <p>If you don't? You might just become a financial burden for your adult children when you can't afford to maintain a healthy retirement lifestyle. (See also: <a href="http://www.wisebread.com/are-you-ruining-your-retirement-by-spoiling-your-kids?ref=seealso" target="_blank">Are You Ruining Your Retirement by Spoiling Your Kids?</a>)</p> <h2>8. You've tinkered with your savings formula</h2> <p>Early in your working days, it's a sound strategy to invest in a riskier mix of stocks, bonds, and other investment vehicles. The potential rewards are higher, and you have more years to recoup whatever losses you might suffer from a potentially more volatile portfolio.</p> <p>But once you get closer to retirement, it's time to rebalance your investments to eliminate much of the risk. When you're 10 or five years from retirement, you want a safer investment mix because time is running short. You won't have as many years to recover from the downs that sometimes come with a high-risk, high-reward savings portfolio.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-signs-youre-making-all-the-right-moves-for-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Signs%2520Youre%2520Making%2520All%2520the%2520Right%2520Moves%2520for%2520Retirement.jpg&amp;description=8%20Signs%20Youre%20Making%20All%20the%20Right%20Moves%20for%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Signs%20Youre%20Making%20All%20the%20Right%20Moves%20for%20Retirement.jpg" alt="8 Signs You're Making All the Right Moves for Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/8-signs-youre-making-all-the-right-moves-for-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/half-of-americans-are-wrong-about-their-retirement-savings">Half of Americans Are Wrong About Their Retirement Savings</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-face-4-ugly-truths-about-retirement-planning">How to Face 4 Ugly Truths About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">7 Roadblocks to Retirement (And How to Clear Them)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-so-simple-6-steps-to-a-stable-retirement">It&#039;s So Simple: 6 Steps to a Stable Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-revive-an-old-retirement-fund">How to Revive an Old Retirement Fund</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) contributions debt family full retirement age IRA nest egg saving money social security benefits Tue, 05 Dec 2017 09:00:07 +0000 Dan Rafter 2066271 at http://www.wisebread.com 4 Creative Remote Jobs That Can Supplement Your Retirement Income http://www.wisebread.com/4-creative-remote-jobs-that-can-supplement-your-retirement-income <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-creative-remote-jobs-that-can-supplement-your-retirement-income" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_woman_using_her_laptop_outside_house.jpg" alt="Senior woman using her laptop outside house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For some, retirement is a welcome chance to quit working forever, but for others it can mark the beginning of a new and exciting venture. It could be out of necessity to supplement a smaller retirement income, or a desire to keep yourself busy with a foot in the working world.</p> <p>Either way, earning money in retirement is an option that plenty of people take, and thanks to the internet, there are jobs that can be done from anywhere in the world. This is especially true for people who have a creative streak. If you're on the lookout for a way to pull in a few dollars using your word or design skills, without stepping foot in an office, here are four remote jobs that can bring in some extra cash.</p> <h2>Blogging</h2> <p>If you plan to travel more in retirement, then travel blogging could be a great option for you. Or if you have some other hobby you&rsquo;re passionate about, that could be your blog topic. For people who are articulate, skilled at photography, and enjoy sharing information about their passion, blogging can be a creative and fun way to earn some extra dollars. Bloggers earn money in a variety of ways, and though it's by no means a quick path to plentiful riches, you can start to build an income within months. (See also: <a href="http://www.wisebread.com/5-easy-ways-to-make-extra-money-blogging?ref=seealso" target="_blank">5 Easy Ways to Make Extra Money Blogging</a>)</p> <p>It takes minutes to set up a blog, and once you have the basics in place, you can begin creating your very own online kingdom. Start out with your friends and family and ask them to share your content with their friends and family to give your blog a boost.</p> <p>The top bloggers on the internet earn six-figure salaries, though clearly not everyone will reach this level. It's not unrealistic to be able to rake in a few hundred dollars per month once your site is established.</p> <h2>Editing</h2> <p>Virtually any written text has the potential to require editing, and these days it's far more likely to be done online than with a pen and paper. If you're a stickler for grammar, efficient at fact checking, and can quickly and accurately knock a piece of text into shape, then you could try your hand at editing. To become a good editor, you should be able to provide objective and useful feedback to help writers improve their work, without being condescending or unnecessarily critical.</p> <p>There are many places to find editing work online, which will vary depending on the type of content you're working on. Online job marketplaces such as <a href="https://www.upwork.com/" target="_blank">Upwork</a> and <a href="https://www.freelancer.com/" target="_blank">Freelancer</a> are good places to start, and allow you to search for and submit proposals for jobs that appeal to you. There are also sites commonly referred to as &quot;content mills&quot; that might not offer high-paying projects, but can be relatively easy to get regular work from as a beginner. Sites such as <a href="http://community.copypress.com/writer-and-editor-training/" target="_blank">CopyPress</a>, allow you to go through their training program and earn a certification with them for copy editing, which you can then use to get jobs through the site.</p> <h2>Freelance writing</h2> <p>If you have a way with words and love to share your experiences, freelance writing can provide a great way to supplement your income. There are countless forms of freelance writing, from copywriting to technical writing, so the first step is to find one that suits you. This is different from blogging, in that you'll be writing for other publications, and some assignments may be in print, as opposed to exclusively writing for the web (though there are still endless opportunities to find work creating digital content). It's best to start off with an existing area of expertise that you possess, or something you're passionate about, and then you can expand your repertoire from there.</p> <p>Many online publications have sections that detail how to make submissions directly to them, as well as information on exactly what they are looking for and how they want it presented. As with freelance writing, online job sites are often a good place to start your search. If you have publications in mind that you'd like to write for, then you can also approach them directly with a pitch.</p> <p>Earnings vary wildly for freelance writing, and you may be paid per word, per article, or sometimes per hour. Your skill level and the client will determine what you can bill. But in my experience, you can expect to earn anything from a couple of cents per word, up to a few hundred dollars per article. (See also: <a href="http://www.wisebread.com/22-websites-that-will-pay-you-to-write-for-them?ref=seealso" target="_blank">22 websites That Will Pay You to Write for Them</a>)</p> <h2>Designing websites</h2> <p>I recently met a retired woman from the U.S. who had been working her way around South and Central America for over seven years. She told me that though her retirement income was enough to support a basic lifestyle, she liked to supplement it by doing extra work along the way. Her part-time hustle was designing websites, a skill she'd taught herself in her free time when she retired.</p> <p>Whenever she turned up in a new location, she would head out to the local hotels to canvas for work designing or redesigning their sites. Over the time she'd been traveling, she'd built up a good portfolio and found it quite easy to pick up new clients.</p> <p>Because it's all done online, you can find plenty of web design work that can be done remotely. Web designers can earn up to around $100 per hour, though the average stands at about $59 and it could be $40 at the lower end.</p> <p><span id="1512148244745S" style="display: none;">&nbsp;</span><span id="1512148245408E" style="display: none;">&nbsp;</span>Most websites, particularly for physical businesses, are small and uncomplicated, so even with lower end web design skills, it's possible to create great sites that clients will be happy with. If this is an area you have expertise in, then you can also branch out into bigger projects, but it is still possible to be self-taught and find work.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-creative-remote-jobs-that-can-supplement-your-retirement-income&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Creative%2520Remote%2520Jobs%2520That%2520Can%2520Supplement%2520Your%2520Retirement%2520Income.jpg&amp;description=4%20Creative%20Remote%20Jobs%20That%20Can%20Supplement%20Your%20Retirement%20Income"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Creative%20Remote%20Jobs%20That%20Can%20Supplement%20Your%20Retirement%20Income.jpg" alt="4 Creative Remote Jobs That Can Supplement Your Retirement Income" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/4-creative-remote-jobs-that-can-supplement-your-retirement-income">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-surprising-ways-to-earn-money-online">7 Surprising Ways to Earn Money Online</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-you-can-earn-18-to-25-an-hour-with-amazon-flex">How You Can Earn $18 to $25 an Hour With Amazon Flex</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-ways-to-make-money-on-thanksgiving">11 Ways to Make Money on Thanksgiving</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-ways-to-make-money-on-halloween">15 Ways to Make Money on Halloween</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-money-by-creating-youtube-videos">How to Make Money by Creating YouTube Videos</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Extra Income Retirement extra cash part-time job remote jobs retirement retirement income side gig side hustle work from home working during retirement Mon, 04 Dec 2017 09:30:06 +0000 Nick Wharton 2065224 at http://www.wisebread.com 5 Retirement Struggles Nobody Talks About — And How to Beat Them http://www.wisebread.com/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retired_woman_laptop_520055262.jpg" alt="Woman beating common retirement struggles" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you have ever sat down with a financial planner, you know that one of the main questions that comes up is, &quot;How much income do you think you'll need when you retire?&quot;</p> <p>When I was asked this question, the first answer that popped into my head was, &quot;Hardly any!&quot; In the retirement scenario in my mind, my kids were independent and my home was paid off, leaving few financial obligations. When pressed, I acknowledged that I might need some money for taking fun vacations with all that free time I'll have, and for buying gifts for my grandchildren.</p> <p>While it's true that a lot of the big expenses of our working lives have ideally been paid off by retirement, retirees still face a lot of financial obligations. Retirement is not all learning to paint or strolling on the beach &mdash; despite what prescription drug ads may lead you to believe. A 2016 study by the U.S. General Accounting Office found that retirees on average spend 77 percent of what they spent while they were working, with spending declining decade by decade as retirees age. (See also: <a href="http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them?ref=seealso" target="_blank">9 Unexpected Expenses for Retirees &mdash; And How to Manage Them</a>)</p> <p>Let's go through some of the retirement expenses you may not have accounted for, and how to deal with them.</p> <h2>1. Health care</h2> <p>While other expenses shrink after retirement, medical care spending increases. In the present day, the increase is modest. The same U.S. General Accounting Office report found that retirees ages 65 to 79 spend an average $5,000 a year on health care, compared to $3,900 for workers aged 50 to 64. But predictions for future health care expenses in retirement are dire.</p> <p>HealthView Services' 2017 Retirement Health Care Costs Data Report predicts that medical costs will rise 5.47 percent per year for the foreseeable future &mdash; meaning that today's 65-year-old may be spending $10,000 or more per year on health care by age 75, on top of Medicare coverage.</p> <p>&quot;Health care will be one of the most significant retirement expenditures; however, the savings required to cover this expense may be modest &mdash; especially if one has been utilizing an income replacement ratio (IRR) of 75% to 85%,&quot; warns the report.</p> <p>HealthView recommends talking to your planner not just about income replacement, but also about what you expect medical expenses to be based on your current health. Look at optimizing your retirement portfolio to address those needs. For example, some advisers recommend saving for retirement medical expenses using a health savings account &mdash; although these are only available to workers who have high-deductible health plans. (See also: <a href="http://www.wisebread.com/how-an-hsa-could-help-your-retirement?ref=seealso" target="_blank">How an HSA Could Help Your Retirement</a>)</p> <p>Managing health conditions proactively can also make a big difference in expenses over a lifetime.</p> <p>&quot;A 50-year-old male with type II diabetes can save (an average of) $5,000 per year in pre-retirement health expenses by shifting from Poorly Managed to Well Managed care,&quot; the report says.</p> <h2>2. Taxes</h2> <p>You might expect your income tax to disappear or decline steeply when you retire, but remember that withdrawals from 401(k) plans and traditional individual retirement accounts are taxable, as are most pensions and some Social Security benefits. If your retirement plan involves collecting rent on properties you own, well, that's taxable too. And if you have paid off your mortgage before retiring, remember that you just lost a big tax deduction in the form of mortgage interest payments.</p> <p>The problem of taxes during retirement is the reason many workers also invest in a Roth IRA or Roth 401(k) plan. Unlike a regular retirement account, which you fill with untaxed income, only paying taxes on withdrawals, a Roth takes income you already paid taxes on, and withdrawals are tax free. Since no one knows how tax rates when you retire will compare to tax rates today, many advisers recommend spreading investments across both kinds of accounts to hedge your bets. (See also: <a href="http://www.wisebread.com/heres-how-your-taxes-will-change-when-you-retire?ref=seealso" target="_blank">Here's How Your Taxes Will Change When You Retire</a>)</p> <p>Another thing to consider when retired is whether you plan to make charitable donations part of your estate plan. If you were going to give away thousands of dollars to charities in your will, for example, discuss with an accountant setting up a schedule of giving while you're alive, instead, so that you could take annual tax deductions that could reduce or eliminate taxes you owe.</p> <h2>3. Inflation</h2> <p>In recent years, inflation has been low, but the long term average annual rate of price increases is 3.22 percent. That means that if you retire with benefits and savings designed to cover 80 percent of your current income, those same benefits will cover a smaller portion of your current spending each year, if not invested to grow at a rate faster than inflation. This is why financial planners never advise keeping your life savings in cash, stuffed in a mattress.</p> <p>Of course in retirement you don't want to take on big risks with investments, since you can't earn more money to replace what you lose. But you also can't be too conservative or you risk having inflation shrink your savings each year. With interest rates as low as they are, you can't count on earnings from certificates of deposit to surpass inflation. For most retirees, that means you must have some money in stocks, bonds, or other investments. And you must stick to your investment plan, even if the market gets rocky. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <h2>4. End of life</h2> <p>When you plan your retirement, you're likely thinking more about all the golf you want to play or the traveling you want to do, not so much about spending your final years in a nursing home or planning your funeral. Unfortunately, those less fun expenses must also be planned for.</p> <p>Take a realistic look at how much assisted living and nursing homes cost. If you are still young enough to get it, look into long-term care insurance. Discuss with your family whether they expect you to move in with them if you need more care later in life, or if they would prefer you plan for nursing home care or assisted living. If long-term care needs seem imminent, meet with an attorney who specializes in making Title XIX plans; they can help you learn what assets can be shielded from being liquidated to pay for care. (See also: <a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it?ref=seealso" target="_blank">Is Long Term Care Insurance Worth It?</a>)</p> <p>Medical expenses tend to jump in the final years, costing about $7,000 to $8,000 more per year in the last two years of life, according to HealthView Services.</p> <p>Consider prepaying funeral expenses so that it's not a cost hanging over your head as you enjoy retirement. And certainly meet with an estate planner as part of your retirement planning to make provisions for the distribution of wealth after you are gone. (See also: <a href="http://www.wisebread.com/9-end-of-life-cost-savings-your-survivors-will-thank-you-for?ref=seealso" target="_blank">9 End-of-Life Cost Savings Your Survivors Will Thank You For</a>)</p> <h2>5. Mandatory withdrawals</h2> <p>The moment you turn age 70 and a half, you are required to take minimum distributions from your IRA, 401(k), and other retirement accounts on a schedule set by the IRS. This doesn't sound like a problem &mdash; after all, this is what you saved all that money for. But what if you don't need to spend the required distribution this year? Unfortunately, you still have to withdraw it, and pay taxes on it, or the IRS will confiscate 50 percent of the money you were supposed to withdraw in the form of a tax penalty.</p> <p>While you can't change the IRS's schedule for required withdrawals, and you can't roll the distribution into a different tax-deferred account, you can plan for this requirement and schedule income and spending around it. For instance, you can avoid selling real estate or other investments, or scale back work hours if you are still working, and allow the income you are getting from your retirement account to replace other income. And of course, you can always invest your distribution outside of retirement accounts, if you don't need to spend it.</p> <p>Another way to conquer the mandatory distribution is to plan for it while saving for retirement, for example by putting some income into a Roth IRA, which doesn't have required distributions. As you approach retirement, if your IRA distributions look like they will be too large for you to use, you may also talk to a planner about converting a traditional account into a Roth.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-retirement-struggles-nobody-talks-about-and-how-to-beat-them&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Retirement%2520Struggles%2520Nobody%2520Talks%2520About%2520%25E2%2580%2594%2520And%2520How%2520to%2520Beat%2520Them.jpg&amp;description=5%20Retirement%20Struggles%20Nobody%20Talks%20About%20%E2%80%94%20And%20How%20to%20Beat%20Them"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Retirement%20Struggles%20Nobody%20Talks%20About%20%E2%80%94%20And%20How%20to%20Beat%20Them.jpg" alt="5 Retirement Struggles Nobody Talks About &mdash; And How to Beat Them" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-expensive-mistakes-of-the-newly-retired">9 Expensive Mistakes of the Newly Retired</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-steps-to-take-before-retiring-abroad">13 Financial Steps to Take Before Retiring Abroad</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-its-time-to-retire">8 Signs It&#039;s Time to Retire</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-you-should-budget-your-social-security-checks">Here&#039;s How You Should Budget Your Social Security Checks</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-an-hsa-could-help-your-retirement">How an HSA Could Help Your Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement end of life costs expenses health care hidden costs inflation investments long term care required minimum distributions social security taxes Mon, 04 Dec 2017 09:00:07 +0000 Carrie Kirby 2065326 at http://www.wisebread.com 7 Roadblocks to Retirement (And How to Clear Them) http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-roadblocks-to-retirement-and-how-to-clear-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/sticky_note_on_notice_board.jpg" alt="Sticky note on notice board" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>How often do you dream about retirement? It's nice to think about the day when you can stop answering to a boss, and instead spend your time relaxing, traveling, and enjoying life to the fullest. Well, if you want that dream to become a reality, you may need to make some significant life changes <em>now</em>. If you're guilty of the following things, you could end up working well past your planned retirement age. (See also: <a href="http://www.wisebread.com/how-much-should-you-have-saved-for-retirement-by-30-40-50?ref=seealso" target="_blank">How Much Should You Have Saved for Retirement by 30? 40? 50?</a>)</p> <h2>1. You simply aren't putting enough money away</h2> <p>Most people vastly underestimate the amount they need to stash away for their golden years. The problem comes from the fact that many financial planners will tell you to put between 10 and 15 percent of your income toward retirement. However, that assumes you started saving in your 20s.</p> <p>If you are now 40, and only started putting money away 10 years ago, you need a higher savings rate in order to make up for those missing years. In fact, you would have to put around 25 percent of your salary away each month and work until you're 70 in order to make up for the shortfall. And as always, compound interest is the real key to saving. By missing out on those years in your 20s, you will have significantly impacted your future nest egg. (See also: <a href="http://www.wisebread.com/how-to-start-saving-for-retirement-at-40?ref=seealso" target="_blank">How to Start Saving for Retirement at 40+</a>)</p> <h2>2. You aren't taking advantage of your employer's 401(k) match</h2> <p>Simply put, any kind of match that your employer gives you is free money, and it would be silly not to take advantage of every cent. The average match out there is 3 percent of your pay, although companies can vary greatly on what they offer. This means that if you only put in 2 percent of your salary, you are leaving 0.7 percent of your income on the table. It may not seem like a lot, but that can really add up over time.</p> <p>If your company offers you 50 percent on the dollar for up to 6 percent of your pay, you should be putting 6 percent away. If it's a dollar amount match, say $2,500 per year, make sure you put in at least that amount. (See also: <a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make?ref=seealso" target="_blank">5 Dumb 401(k) Mistakes Smart People Make</a>)</p> <h2>3. Your plan is not aggressive enough</h2> <p>Most 401(k) plans have something called a &quot;target date&quot; that is used to figure out what your retirement portfolio will look like. If you have 30 years to go until retirement, you will almost certainly want at least a moderately aggressive portfolio. This will be comprised primarily of stocks, which offer higher gains, but are more volatile and can lose their value quickly. However, the stock market will always recover over time, and if you have that time to spare, this is the plan you should use.</p> <p>If you have less time to go until retirement, your portfolio will have way less stocks in it, opting instead for a larger percentage of bonds. These are much safer, but they don't have the ability to make as much money as stocks. If you came into the retirement savings habit late, you should talk to a professional about how to organize your portfolio. You simply may not have enough time to make money with a conservative plan, but could also risk losing money with a more aggressive one. (See also: <a href="http://www.wisebread.com/start-planning-now-for-when-your-target-date-fund-ends?ref=seealso" target="_blank">Start Planning Now for When Your Target-Date Fund Ends</a>)</p> <h2>4. You're spending too much of your disposable income</h2> <p>A coffee here. A magazine there. Eating out every week. These small expenditures really add up, and instead of saving the money you'll need to survive after you stop working, these frivolous buys are burning holes in your pocket.</p> <p>Yes, life's little luxuries are important for your morale and self-esteem from time to time, but get a handle on those expenses and budget accordingly. You may find that you're spending $40 a month just on coffee. That's $480 a year. Let's say you plan on retiring in 30 years, and you stop getting that morning coffee for one year. A good rate of return on retirement investments is about 8 percent. Thirty years down the road, that $480 will become almost $5,000. If you cut your daily coffee out entirely, it will add over $63,500 to your retirement fund in a 30 year period. Now think about it: Is that &quot;luxury&quot; really worth it? (See also: <a href="http://www.wisebread.com/7-effortless-ways-to-prevent-budget-busting-impulse-buys?ref=seealso" target="_blank">7 Effortless Ways to Prevent Budget-Busting Impulse Buys</a>)</p> <h2>5. Social Security benefits alone will not be enough</h2> <p>It seems unfair that we pay into the system all our working lives, and when it comes time to retire, we get very little back. But, that is simply the result of a population that is living longer, yet retiring at the same age of 65. There just isn't enough money in Social Security to totally support you unless you have almost everything completely bought and paid for by the time you retire, and even then, it will be tough going.</p> <p>Right now, benefits for retired workers average around $1,374 per month, or just over $16,400 annually. When you consider that the federal poverty line is currently $12,060 for a one-person household, that's a little too close for comfort.</p> <p>While it's possible to survive on that, barely, you have to ask yourself: Do you really want to spend the last 20+ years of your life scraping to make ends meet? (See also: <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement?ref=seealso" target="_blank">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a>)</p> <h2>6. You're using your home like a cash machine</h2> <p>It's so tempting to dig into the equity in our homes, especially when the housing market is strong and interest rates are so low. But, every time you refinance your home to take out money, and start another 30-year mortgage, you are seriously impacting the quality of your retirement.</p> <p>Ideally, by the time you retire, you'll want that home to be paid for; no mortgage left, only taxes and maintenance. But if you are 40 years old and just did a 30-year refinance to take out some cash, you've ensured you'll be paying that mortgage until you hit 70. Not only that, but every time you do a cash-out refi, you're spending money on fees.</p> <p>If you must refinance, consider doing a 10 or 15-year fixed rate term instead. Get that mortgage paid off quickly. You'll also pay thousands less in interest over the life of the loan. (See also: <a href="http://www.wisebread.com/3-times-a-refinance-is-the-wrong-move?ref=seealso" target="_blank">3 Times a Refinance Is the Wrong Move</a>)</p> <h2>7. You're not aiming to become a millionaire</h2> <p>When people start tucking away money for retirement, they don't really consider the lump sum they are going to need when they eventually stop working. And ask any average Joe if they will be a millionaire one day, and they will laugh at you and say something like, &quot;Yeah, right!&quot;</p> <p>But, everyone should be doing what they can to become a millionaire in retirement. While it may not be possible to hit that figure exactly, you should still aim as high as you can.</p> <p>It's commonly advised that by the time you hit retirement age, you should have <em>at least</em> 10 times your current salary in your retirement account. With the current median income hovering around the $60K mark, that means that you should have just over half a million dollars in your fund if you retire this year. If you're a higher earner, let's say you earn $120K a year, that figure should be over a million. (See also: <a href="http://www.wisebread.com/heres-how-far-1-million-will-actually-go-in-retirement?ref=seealso" target="_blank">Here's How Far $1 Million Will Actually Go in Retirement</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-roadblocks-to-retirement-and-how-to-clear-them&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Roadblocks%2520to%2520Retirement%2520%2528And%2520How%2520to%2520Clear%2520Them%2529.jpg&amp;description=7%20Roadblocks%20to%20Retirement%20(And%20How%20to%20Clear%20Them)"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Roadblocks%20to%20Retirement%20%28And%20How%20to%20Clear%20Them%29.jpg" alt="7 Roadblocks to Retirement (And How to Clear Them)" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-making-all-the-right-moves-for-retirement">8 Signs You&#039;re Making All the Right Moves for Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-its-time-to-retire">8 Signs It&#039;s Time to Retire</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/half-of-americans-are-wrong-about-their-retirement-savings">Half of Americans Are Wrong About Their Retirement Savings</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation">4 Ways to Protect Your Retirement From Inflation</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-early-retirement-might-be-financially-risky">4 Reasons Early Retirement Might Be Financially Risky</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) benefits golden years homeownership nest egg poverty refinance saving money social security stocks Wed, 29 Nov 2017 10:00:06 +0000 Paul Michael 2062578 at http://www.wisebread.com 6 Ways Meeting the 2018 401(k) Contribution Limits Will Brighten Your Future http://www.wisebread.com/6-ways-meeting-the-2018-401k-contribution-limits-will-brighten-your-future <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-meeting-the-2018-401k-contribution-limits-will-brighten-your-future" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_with_retirement_formula.jpg" alt="Piggy Bank with retirement formula" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Starting next year, investors will be allowed to contribute more money into their 401(k)s. In 2018, the limit on annual contributions to a 401(k) plan will rise from $18,000 to $18,500.</p> <p>That additional $500 may not seem like a lot, but you should try and hit the new maximum if you can. Maxing out your 401(k) is often the best way to accumulate a healthy sum for retirement, and there are great tax benefits as well.</p> <p>If you're on the fence about whether you need to direct another $500 into your 401(k), consider these arguments.</p> <h2>1. It could net you tens of thousands of dollars</h2> <p>It's not easy to contribute $18,500 annually into a retirement account. But if you can do it, that extra $500 each year can really pay off. Let's say you're 30 years old and plan to retire at age 65. Assuming a conservative 7 percent return, that extra $500 annually could mean an additional $74,000 overall. If you start contributing that extra $500 starting at age 25, and keep doing it for 40 years, the difference is $106,000 over time &mdash; more than an entire year's worth of living expenses for many people.</p> <h2>2. It's more money for you and less to taxes</h2> <p>If you have $500 in income available, that's money that the IRS will get a share of, unless you place it in a 401(k) plan or traditional IRA. Any money you contribute to these retirement accounts is deducted from your taxable income. If you are in a high tax bracket, that $500 could actually just represent about $300 in your paycheck. If Uncle Sam would take that much anyway, why not invest the whole amount instead?</p> <h2>3. You can find $42 a month</h2> <p>If you are at the maximum contribution now, you can find a way to hit the new ceiling. Eat out less. Ditch the morning coffee. Quit that gym you never go to. If you break down $500 over the course of a year, it comes out to less than $42 a month &mdash; or barely $10 a week. That's the cost of a mediocre lunch out. Even the smallest amount of belt-tightening can help you hit this goal, and it's probably not money you'll notice. But you'll notice it later at retirement time.</p> <h2>4. You may have already maxed out your IRA</h2> <p>If you've been placing money in an individual retirement account (IRA), you may be aware that contribution limits are lower than 401(k) plans. People under age 50 are permitted to contribute only $5,500 each year to an IRA, and it's not uncommon for people to hit that maximum. If your IRA is maxed out, having permission to place an additional $500 in a 401(k) is a huge bonus.</p> <h2>5. The limit might be decreased in the future</h2> <p>We should be thankful that in 2018, the 401(k) contribution limit is rising. That's because some members of Congress have suggested that the limit could be drastically reduced in the future as part of tax reform. Thankfully, it seems like discussion of such changes has been tabled, but there's no guarantee the idea won't be resurrected in the future. In the meantime, it's a good idea to contribute as much as you can.</p> <h2>6. Where else are you going to put your money?</h2> <p>If you have $500 a year to spare, the stock market may be the smartest place to put it. Interest rates are still very low, so placing it into the bank would only result in a few bucks each year. And very few other investments offer the same kinds of consistent returns as stocks. Unless you plan to use the money to purchase a home or start a business, you likely won't do much better on a consistent basis than &mdash; or get the same tax advantages of &mdash; investing in stocks in a 401(k).</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-ways-meeting-the-2018-401k-contribution-limits-will-brighten-your-future&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Ways%2520Meeting%2520the%25202018%2520401%2528k%2529%2520Contribution%2520Limits%2520Will%2520Brighten%2520Your%2520Future.jpg&amp;description=6%20Ways%20Meeting%20the%202018%20401(k)%20Contribution%20Limits%20Will%20Brighten%20Your%20Future"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Ways%20Meeting%20the%202018%20401%28k%29%20Contribution%20Limits%20Will%20Brighten%20Your%20Future.jpg" alt="6 Ways Meeting the 2018 401(k) Contribution Limits Will Brighten Your Future" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/6-ways-meeting-the-2018-401k-contribution-limits-will-brighten-your-future">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-common-retirement-regrets-you-can-avoid">3 Common Retirement Regrets You Can Avoid</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-tell-if-your-401k-is-a-good-or-a-bad-one">How to Tell if Your 401K Is a Good or a Bad One</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-choose-a-roth-401k-or-a-regular-401k">Should You Choose a Roth 401k or a Regular 401k?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-things-to-know-about-your-401k-and-ira-in-2016">5 Important Things to Know About Your 401K and IRA in 2016</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401(k) limits government investing IRA mutual funds stocks taxes Wed, 29 Nov 2017 09:00:07 +0000 Tim Lemke 2058941 at http://www.wisebread.com Here's How Far $1 Million Will Actually Go in Retirement http://www.wisebread.com/heres-how-far-1-million-will-actually-go-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-how-far-1-million-will-actually-go-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/nest_made_of_american_currency_horizontal_0.jpg" alt="Nest Made of American Currency Horizontal" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For years, saving $1 million for retirement has been on my nest egg to-do list. Using the 4 percent rule, where you withdraw 4 percent of your savings each year during retirement, a million dollars would produce a hypothetical income lasting up to 33 years. That seems like a nice round number and reasonable goal, especially with the traditional retirement age holding steady at 65 and the average American living for 20 years after retiring.</p> <p>However, depending on where you live, $1 million may not last very long at all. So before you dive into your golden years, you should make sure you know exactly how far your savings will take you. (See also: <a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement?ref=seealso" target="_blank">How Much Can You Afford to Spend in Retirement?</a>)</p> <h2>Where you live matters most</h2> <p>GoBankingRates compared the cost of basic living expenses in each state and found the length of time a million dollars lasts varies significantly across the country. In Hawaii, a state with the highest cost of living index, you could run out of cash in under 12 years. Unless camping out on the beach while subsisting on pineapples is your thing, Hawaii may not be the best option.</p> <p>On the other hand, there's Mississippi. That same nest egg would last 26 years in the Magnolia State. Mississippi has the lowest cost of living index in the country. A retiree could live comfortably paying just $11,000 a year for housing. You may not be able to visit the white sandy beaches of Oahu, but the Gold Coast is nothing to sneeze at.</p> <h2>Other expenses to plan for in retirement</h2> <p>In addition to housing, the cost of living index accounts for basic necessities like food, taxes, and health care. Some states, like Vermont, tax Social Security benefits. Florida residents have the lowest Social Security payout, but they don't pay state taxes on those benefits.</p> <p>Access and affordable health care options, senior transportation, and job opportunities for people over 65 are other financial aspects to keep in mind according to the Best Cities for Successful Aging index. Durham-Chapel Hill clocks in at one of the top spots in their list of best retirement cities. Retirees are attracted to the mild climate, low state and property taxes, and ample access to world-class medical facilities. Your $1 million nest egg would last nearly 24 years in this area. (See also: <a href="http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them?ref=seealso" target="_blank">9 Unexpected Expenses for Retirees &mdash; And How to Manage Them</a>)</p> <h2>Calculating your retirement goal</h2> <p>I like my hometown. Chicago may not top the charts on any best-place-to-retire mega list, but access to my extended family, proximity to my future grandchildren, and a vibrant walkable city with great public transportation options may still be quality of life factors I value in my golden years. Staying put may be desirable even if your hometown doesn't make a &quot;where to retire&quot; hot list on the internet. Determining your retirement savings goal should start with where you plan to live and how much it will cost to live there.</p> <p>Roger Wohlner, a financial adviser with The Chicago Financial Planner, advises would-be retirees to consider a number of options. Calculating a retirement savings goal is different for everyone.</p> <p>&quot;Are you going to have a mortgage? Are you going to move somewhere else and downsize? What are you going to spend your money on? It's really no different from how you live pre-retirement,&quot; he says.</p> <p>Most of all, he suggests we factor in health care costs into any post-employment savings projections. &quot;As you get older, [medical expenses] are more pronounced in retirement,&quot; Wohlner says.</p> <p>Fidelity's annual study on health care costs found that a retired couple can expect to spend $275,000 on medical expenses during retirement, not including long-term care. And health care costs are rising well beyond the rate of inflation: The increase in medical spending from 2016 to 2017 alone was $15,000.</p> <p>With your basic living expenses in mind, estimated health care projections, and a few dollars thrown in for hobbies &mdash; like traveling or spoiling the <em>grands</em> &mdash; head to your nearest online retirement calculator.</p> <p>Experts suggest that a comfortable retirement lifestyle will require 70 to 80 percent of your current annual salary. Using a simple <a href="https://www.calcxml.com/calculators/retirement-calculator" target="_blank">retirement calculator</a>, you can figure out what your savings goal should be based on your savings starting point and estimated withdrawal needs. With a custom retirement savings goal in hand, you can start to determine if $1 million is still a workable goal, relocation is in your retirement future, or you need to revise your current savings strategy. (See also: <a href="http://www.wisebread.com/how-much-should-you-have-saved-for-retirement-by-30-40-50?ref=seealso" target="_blank">How Much Should You Have Saved for Retirement by 30? 40? 50?</a>)</p> <p>In either case, determining your retirement goal should be an annual exercise, according to financial experts like Roger Wohlner. &quot;This is not something you just do once. Circumstances change. People should really be updating this calculation every year,&quot; he says.</p> <p>If entering your golden years with $1 million in savings doesn't work out in a desirable U.S. location, consider retiring abroad to one of many affordable countries where your savings will stretch even further. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fheres-how-far-1-million-will-actually-go-in-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHeres%2520How%2520Far%2520%25241%2520Million%2520Will%2520Actually%2520Go%2520in%2520Retirement.jpg&amp;description=Heres%20How%20Far%201%20Million%20Dollars%20Will%20Actually%20Go%20in%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Heres%20How%20Far%20%241%20Million%20Will%20Actually%20Go%20in%20Retirement.jpg" alt="Here's How Far $1 Million Will Actually Go in Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/toni-husbands">Toni Husbands</a> of <a href="http://www.wisebread.com/heres-how-far-1-million-will-actually-go-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-you-should-budget-your-social-security-checks">Here&#039;s How You Should Budget Your Social Security Checks</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50">7 Reasons to Invest in Stocks Past Age 50</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico">How Almost Anyone Can Afford to Retire in Mexico</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-couples-are-shortchanging-their-retirement-savings">4 Ways Couples Are Shortchanging Their Retirement Savings</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them">5 Retirement Struggles Nobody Talks About — And How to Beat Them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement cities cost of living expenses health care income life span old age relocation saving money withdrawal rate Tue, 28 Nov 2017 10:00:06 +0000 Toni Husbands 2059323 at http://www.wisebread.com 5 Details You Shouldn't Neglect When Retiring Overseas http://www.wisebread.com/5-details-you-shouldnt-neglect-when-retiring-overseas <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-details-you-shouldnt-neglect-when-retiring-overseas" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_african_american_couple_embrace_on_beach_boardwalk.jpg" alt="Happy African American Couple Embrace on Beach Boardwalk" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>No one should take the decision to retire abroad lightly. It's a big move that involves a huge amount of careful planning in order to execute it successfully. But even people who believe they've covered every aspect of their move abroad can still overlook some important details. Here are five planning details you shouldn't neglect when retiring overseas. (See also: <a href="http://www.wisebread.com/9-things-to-know-before-retiring-abroad?ref=seealso" target="_blank">9 Things to Know Before Retiring Abroad</a>)</p> <h2>1. Health care</h2> <p>Having a plan in place for how you're going to cope with any adverse health complications that may arise is absolutely paramount. Each country has its own individual health care system in place. Some of these are complicated to access and understand. Some are private, some public, and others are a mixture of the two.</p> <p>Health care is also potentially extremely expensive if you choose to pay out of pocket, meaning you'll need to get familiar with those costs before choosing where you settle. As a U.S. citizen living abroad, you will not be covered by Medicare in your chosen country, so it's important to have an alternative plan. (See also: <a href="http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care?ref=seealso" target="_blank">4 Affordable Retirement Spots With World-Class Health Care</a>)</p> <p>With the majority of U.S. health plans, you won't actually be covered when you're abroad. Depending on the country you're in, you should either get an in-country insurance plan or comprehensive international insurance coverage.</p> <p>Another thing to consider is the standard of health care in your chosen destination, as well as where you would have to go for treatment. Even those countries that boast world class health care may have very few clinics and hospitals in more rural areas, making them far harder to access. (See also: <a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in?ref=seealso" target="_blank">How to Choose the Perfect Country to Retire In</a>)</p> <h2>2. Local laws</h2> <p>Before making your big move, you need to have thoroughly researched the local laws in your country of choice and how they might affect you when you're living there. It's best not to assume anything without knowing the legal realities, as regulations are very different in each country.</p> <p>Your will may not be legally enforceable in the country of your choice, and if you have assets, investments, and properties in different countries, things can become extremely complicated. Each country's laws need to be taken into account when the will is being finalized to ensure that your wishes are carried out correctly.</p> <p>An example of this is forced heirship laws in some European and Latin American countries. These laws state that certain relatives cannot be disinherited from your estate, usually a spouse, children, and grandchildren. There are also lots of tax implications to be considered.</p> <p>But legal matters go beyond those referring to your assets. Think about other things like driving and traffic laws, and the legality of your license if you intend to drive. Even political and civil freedoms you take for granted at home might be entirely different. (See also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <h2>3. Tax requirements</h2> <p>Unfortunately, if you remain a U.S. citizen when you retire abroad, your U.S. tax obligations are an inescapable reality, regardless of where you go in the world. You're still required to file your tax returns every year with the IRS exactly as if you were still at home.</p> <p>These rules stand even if you relocate all of your assets to your country of retirement, or any other country for that matter. Depending on which country you are in, you'll more than likely have to fulfill tax obligations there as well, which will potentially mean you'll end up being double taxed.</p> <p>There are a number of countries around the world that have policies in place to address double taxation. For example, Portugal offers Non-Habitual Resident Status, which exempts retirees from paying taxes there. Even so, you will generally still need to continue to pay taxes in the U.S. (See also: <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries?ref=seealso" target="_blank">Retire for Half the Cost in These 5 Countries</a>)</p> <h2>4. Future assistance to loved ones</h2> <p>As a retiree, you may have children and grandchildren, and even if they're no longer dependent on you, you might still wish to help them out from time to time. If this is the case, then include a contingency for these expenses in your retirement plan.</p> <p>You might want to contribute toward your children's weddings, help them with a deposit for their first house, or to come and visit you as a family. Grandchildren might have school trips, first cars, or college expenses that you want to assist with, as well.</p> <p>Wherever these costs may come from, you'll need to have a plan for how you're going to pay for them. This is a separate contingency from your own personal one and you should consider how you can pay for these expenses without denting your own savings. (See also: <a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad?ref=seealso" target="_blank">Don't Let These Expenses Spoil Your Retirement Abroad</a>)</p> <h2>5. An exit plan</h2> <p>Even the best laid plans can go awry, so though it will probably be the very last option you want to consider, it's important to have an exit plan in place. No matter how thorough you are, there are lots of outside factors that could turn your dream sour, and the fact is that it may not work out.</p> <p>Political instability, drastic fluctuations in exchange rates, financial scams, and even wars could all affect your experience. Homesickness could affect you in ways that you never thought possible.</p> <p>Without allowing it to negatively impact your retirement by making it a constant consideration, it's still a good idea to make a robust plan for retreating, if need be. Put together a strategy and then forget about it until it's absolutely required. (See also: <a href="http://www.wisebread.com/9-retirement-hotspots-that-are-cheaper-now-than-ever-before?ref=seealso" target="_blank">9 Retirement Hotspots That Are Cheaper Now Than Ever Before</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-details-you-shouldnt-neglect-when-retiring-overseas&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Details%2520You%2520Shouldnt%2520Neglect%2520When%2520Retiring%2520Overseas.jpg&amp;description=5%20Details%20You%20Shouldnt%20Neglect%20When%20Retiring%20Overseas"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Details%20You%20Shouldnt%20Neglect%20When%20Retiring%20Overseas.jpg" alt="5 Details You Shouldn't Neglect When Retiring Overseas" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/5-details-you-shouldnt-neglect-when-retiring-overseas">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-steps-to-take-before-retiring-abroad">13 Financial Steps to Take Before Retiring Abroad</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in">How to Choose the Perfect Country to Retire In</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-retirement-hotspots-that-are-cheaper-now-than-ever-before">9 Retirement Hotspots That Are Cheaper Now Than Ever Before</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-smart-reasons-to-retire-abroad">7 Smart Reasons to Retire Abroad</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care">4 Affordable Retirement Spots With World-Class Health Care</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel moving in retirement overseas retirement overseas travel retirement plan retirement planning retirement tips retiring abroad Tue, 28 Nov 2017 09:30:10 +0000 Nick Wharton 2058831 at http://www.wisebread.com How to Find Your New Identity After Retirement http://www.wisebread.com/how-to-find-your-new-identity-after-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-find-your-new-identity-after-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_black_boy_embracing_grandfather.jpg" alt="Young black boy embracing grandfather" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Most people work for at least 35 years before they decide to retire. This provides ample time for a person's job to become one of the most stable parts of their identity.</p> <p>A lot of retirees end up feeling lost once their career is no longer part of their everyday life. Without the identity that their job provided them, they don't know who they are anymore. Some retirees end up going back to work, while others eventually find their way through to a fulfilling second act. If you are retiring or thinking about retiring, here are some ways to make the transition to your new life smoother. (See also: <a href="http://www.wisebread.com/6-things-you-might-do-on-your-first-day-of-retirement?ref=seealso" target="_blank">6 Things You Might Do on Your First Day of Retirement</a>)</p> <h2>1. Volunteer for your favorite nonprofit</h2> <p>Most of us have a nonprofit or two that we support and would love to do more for, if only there were time. Well, guess what? When you retire, you will finally have that time. Why not invest it in an organization that means something to you? You can volunteer at your local animal shelter, church, homeless shelter, or any other organization you've always wanted to offer a helping hand to.</p> <p>If you think you will miss your job or you have professional skills that you want to continue using, you can almost always find a way to use them in the nonprofit sector. Many retirees end up having a voice on the board of their favorite nonprofit, maintaining the books, or using their interpersonal skills to provide friendship and counsel to vulnerable populations, such as at-risk teens, elderly people, or refugees. If you have the interest, the skill, and the time, you can always find a place that needs what you're offering.</p> <h2>2. Focus on relationships</h2> <p>When life is busy, it can be hard to focus on relationships. As you look toward retirement, think about the relationships you want to invest more time in. Maybe you can finally take your spouse out to dinner every month, like you've wanted to do since you got married. Maybe you want to baby-sit your grandchildren once a week to develop a closer bond with them.</p> <p>Investing in relationships can be an adjustment at first, especially if the people around you aren't used to you having so much time available. If you persist, though, you may find that you get to know your loved ones better than you ever did before.</p> <h2>3. Find a part-time gig</h2> <p>Retirement is the perfect time to find a part-time job doing something you've always wanted to do. Maybe you adore animals, and now you finally have the time to put in a few hours a week at a boarding facility. If you love plants, you can probably find part-time work at your local nursery. If antiques have always been your hobby, look for work at a shop or auction house.</p> <p>See this as an opportunity to explore interests that you couldn't explore before. If you're truly interested, willing to learn, and humble, you can find work where you can learn about almost anything. (See also: <a href="http://www.wisebread.com/6-cool-jobs-for-retirees?ref=seealso" target="_blank">6 Cool Jobs for Retirees</a>)</p> <h2>4. Follow your dreams</h2> <p>Most of us have things we've always wanted to do but just couldn't get into because of the time involved. Retirement is the perfect chance to pursue these opportunities. Think about taking up an instrument, learning to paint, or finally getting that degree you've always put off pursuing. You may even want to start a small business or look at selling something that you make on the side.</p> <p>Remember that you're never too old to start or learn something new. Whatever it is that you have always wanted to know, do, or be, you have the chance to pursue that after retirement, as long as you don't stand in your own way.</p> <h2>5. Look for open doors</h2> <p>One of the best things about being retired is that you can do what you want, when you want. You can also change course at any time if something isn't working out the way you wanted it to. This means that there's no reason not to go after something, even if it doesn't end up working out. Because you have freedom with your time, you can go through any and all of the doors that open to you, since you can always change your mind later.</p> <p>If you aren't sure what to pursue after retirement, keep an open mind. Try to see everything around you as a potential opportunity. When a door opens or an offer is made, walk through it. If it doesn't work out, something else will come along eventually.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-find-your-new-identity-after-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Find%2520Your%2520New%2520Identity%2520After%2520Retirement%2520%25281%2529.jpg&amp;description=How%20to%20Find%20Your%20New%20Identity%20After%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Find%20Your%20New%20Identity%20After%20Retirement%20%281%29.jpg" alt="How to Find Your New Identity After Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/how-to-find-your-new-identity-after-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/im-financially-free-now-what">I&#039;m Financially Free. Now What?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-making-all-the-right-moves-for-retirement">8 Signs You&#039;re Making All the Right Moves for Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-keep-anxiety-from-ruining-your-budget">5 Ways to Keep Anxiety From Ruining Your Budget</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-travel-full-time-for-17000-a-year-or-less">How to Travel Full-Time for $17,000 a Year (or Less!)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-simple-rules-of-excellent-houseguest-etiquette">11 Simple Rules of Excellent Houseguest Etiquette</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle Retirement family hobbies identity crisis part-time jobs relationships self improvement volunteering Mon, 27 Nov 2017 10:00:06 +0000 Sarah Winfrey 2057595 at http://www.wisebread.com 4 Affordable Retirement Spots With World-Class Health Care http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-affordable-retirement-spots-with-world-class-health-care" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_woman_placing_hands_on_the_shoulder_of_senior_man.jpg" alt="Senior woman placing hands on the shoulder of senior man" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Health care is one of the biggest considerations for any retiree planning to settle abroad, and could be a deciding factor when choosing which country to move to. Since Medicare does not cover health care costs for U.S. citizens living overseas, it&rsquo;s important to have a plan in place for how you&rsquo;re going to pay for it. But more than that, it&rsquo;s well advised to select somewhere that has a quality health care system to ensure that you get a good standard of treatment when you require it. (See also: <a href="http://www.wisebread.com/follow-these-5-steps-to-full-health-care-coverage-in-retirement?ref=seealso" target="_blank">Follow These 5 Steps to Full Health Care Coverage in Retirement</a>)</p> <p>As the saying goes, you can&rsquo;t put a price on your health. You can however, reduce how much it will cost for any treatment required. Many countries that are affordable to live in have health care on par with the U.S., so not only will your medical bills go down, but so will your cost of living.</p> <p>Note: All cost of living estimates refer to figures from <a href="http://numbeo.com" target="_blank">Numbeo</a>, the world&rsquo;s largest database of user contributed data about cities and countries worldwide.</p> <h2>Mexico</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/san_miguel_de_allende_in_mexico.jpg" width="605" height="340" alt="" /></p> <p>Living costs in Mexico City are nearly 60 percent lower than those in New York City, which is just one of the many reasons the country is a popular destination for retirees. It also has a high number of expats and a selection of communities specifically set up for retired Americans. Whether you want beautiful beaches, quaint colonial towns, or bustling cities with developed infrastructures, Mexico has it all. (See also: <a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico?ref=seealso" target="_blank">How Almost Anyone Can Afford to Retire in Mexico</a>)</p> <p>As a foreigner, you won&rsquo;t be entitled to free public health care, but you&rsquo;ll have wide access to facilities because the majority of hospitals in Mexico are private establishments. Perhaps unsurprisingly, many of the best medical facilities in this country are based within the major cities of Mexico City, Guadalajara, and Monterrey. Thanks to the country&rsquo;s proximity to the U.S., many of Mexico&rsquo;s doctors not only speak excellent English, but have also spent time training and studying in the U.S.</p> <p>Dental care is particularly cheap in Mexico, with many U.S. citizens making special trips to enjoy the low prices. The border town of Los Algodones has even been nicknamed the &ldquo;dental capital of the world&rdquo; thanks to the high concentration of dental clinics there. Opticians are also easy to find in Los Algodones and there are a number of national chains and franchises that provide low priced examinations and treatments. (See also: <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries?ref=seealso" target="_blank">Retire for Half the Cost in These 5 Countries</a>)</p> <h2>Malaysia</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/floating_mosque_reflection_in_penang_malaysia.jpg" width="605" height="340" alt="" /></p> <p>Malaysia is regularly recognized as one of the best countries to retire in thanks to its welcoming culture, warm climate, and extremely low living costs. Life in the capital, Kuala Lumpur, is 54 percent cheaper than in New York City, meaning your dollar goes a lot further. Retirees from across the globe understandably see this as a real attraction, and in the major cities you&rsquo;ll find large expat populations.</p> <p>Medical tourism is big business here, so much so that Malaysia&rsquo;s Ministry of Health has its own Healthcare Travel Council. It was set up by the government to raise the profile of the country as a top destination for world-class health care services and increase both the quality and quantity of medical tourism. It helps provide a standardized level of service by only approving and endorsing top quality medical facilities, which should give you peace of mind when selecting where to get treatment.</p> <p>As a non-Malaysian, you won&rsquo;t have access to free public health care, meaning you&rsquo;ll need to get a good insurance policy. However, these are generally cheaper than in the U.S., and will enable you to receive treatment in either public or private facilities, depending on your preference. (See also: <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford?ref=seealso" target="_blank">5 Incredible Places to Retire Abroad That Anyone Can Afford</a>)</p> <h2>Costa Rica</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/national_theatre_of_costa_rica_in_san_jose.jpg" width="605" height="340" alt="" /></p> <p>With stunning Caribbean beaches, lush inland jungles, developed cities, and a warm, sunny climate all year round, Costa Rica really has it all. The cost of living in San Jose is 40 percent below that of New York City, while the standard of living remains extremely high. It&rsquo;s little wonder Costa Rica is so popular among retirees from the U.S.</p> <p>Many U.S. citizens already travel to Costa Rica every year for so-called medical tourism, as the prices are far lower than back home. But for expats living there as legally recognized residents, it gets even better. You have access to both tiers of their health service, private and public. If you need emergency treatment, you are eligible to receive it under the universal Caja system, as well as regular checkups, many prescription drugs, and even some surgeries.</p> <p>In addition to the public health care available, there&rsquo;s also an excellent private system that many retirees pay for, mainly because waiting times on non life-threatening surgeries are much shorter. Both systems are renowned for having up-to-date equipment, facilities, and technologies, which partly explains why the health care is rated so highly. You&rsquo;ll also find that most doctors speak English to a very high standard, which should alleviate any concerns around communication. (See also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <h2>Portugal</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/porto_portugal_cityscape.jpg" width="605" height="340" alt="" /></p> <p>This former world superpower on the southern tip of Europe&rsquo;s Iberian Peninsula once ruled over territories across Latin America, Oceania, Asia, and Africa. These days it&rsquo;s more famous as a major tourist destination, thanks to its incredible beaches, historic architecture, and diverse cuisine. With Lisbon&rsquo;s cost of living 43 percent lower than New York&rsquo;s, many retirees are now viewing this as the perfect place to settle down. The Algarve coast in particular is a retirement hot spot, as it has great weather, beautiful beaches, and a large, established expat community for support.</p> <p>Portugal has always been a well-loved holiday and retirement destination for Europeans, but recently it&rsquo;s become popular among Americans as well. With Portugal&rsquo;s introduction of the Non-Habitual Resident Regime, it&rsquo;s now possible receive your pension tax free here as well as many other sources of income.</p> <p>On top of these benefits, Portugal&rsquo;s health care system is well-known for having excellent facilities and well-trained staff. There is a good public health care system here that foreigners have access to. It&rsquo;s free apart from some nominal patient contributions used to ensure people access the service in the correct way &mdash; for example, not going to the emergency room unless absolutely necessary. Doctors, particularly in the popular areas for retirees, generally speak English.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-affordable-retirement-spots-with-world-class-health-care&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Affordable%2520Retirement%2520Spots%2520With%2520World-Class%2520Health%2520Care%2520%25281%2529.jpg&amp;description=4%20Affordable%20Retirement%20Spots%20With%20World-Class%20Health%20Care"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Affordable%20Retirement%20Spots%20With%20World-Class%20Health%20Care.jpg" alt="4 Affordable Retirement Spots With World-Class Health Care" width="250" height="374" /></p> <div style="display: none;"> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Affordable%20Retirement%20Spots%20With%20World-Class%20Health%20Care%20%281%29.jpg" alt="4 Affordable Retirement Spots With World-Class Health Care" width="212" height="605" /></p> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-retirement-hotspots-that-are-cheaper-now-than-ever-before">9 Retirement Hotspots That Are Cheaper Now Than Ever Before</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-smart-reasons-to-retire-abroad">7 Smart Reasons to Retire Abroad</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-steps-to-take-before-retiring-abroad">13 Financial Steps to Take Before Retiring Abroad</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in">How to Choose the Perfect Country to Retire In</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Health and Beauty Retirement Travel health care international travel retire abroad retirement retirement hot spots world-class health care Tue, 21 Nov 2017 09:30:10 +0000 Nick Wharton 2056742 at http://www.wisebread.com 13 Financial Steps to Take Before Retiring Abroad http://www.wisebread.com/13-financial-steps-to-take-before-retiring-abroad <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/13-financial-steps-to-take-before-retiring-abroad" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_couple_enjoying_their_retirement.jpg" alt="Happy couple enjoying their retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If things go well for you, retirement can last for decades. But your retirement savings might not, especially if you live in a high-cost area. Households with a resident aged 65 or older have a median income of just $38,515, according to the U.S. Census Bureau. It's no wonder that the number of Americans retiring abroad grew 17 percent between 2010 and 2015, now numbering some 400,000, according to the Social Security Administration. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <p>But retiring abroad isn't as simple as going on vacation. How will you access your savings or benefits from overseas? Can you buy property? What about medical care? All these questions can be addressed with some pre-takeoff financial planning. (See also: <a href="http://www.wisebread.com/9-things-to-know-before-retiring-abroad?Ref=seealso" target="_blank">9 Things to Know Before Retiring Abroad</a>)</p> <h2>1. Find a retiree-friendly destination</h2> <p>Some places have incentives like tax breaks and visa offers to attract American retirees, such as Panama and Costa Rica's <em>pensionado </em>programs. You may also qualify for senior citizen benefits established for locals, such as Ecuador's senior discount program, which offers savings on airfare, utilities, and sporting events.</p> <p>In addition, it's a good idea to consult the <a href="https://travel.state.gov/content/passports/en/country.html" target="_blank">State Department's country-specific information</a> about visa laws, health and safety conditions, and how much money you'd be allowed to bring into the country with you. (See also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <h2>2. Find out if you can get Social Security payments there</h2> <p>Six in 10 retirees rely on Social Security for at least half their income, according to the Social Security Administration, making this a pretty important consideration. Fortunately, the SSA can send you your check if you move abroad to most countries, with the notable exceptions of Cuba and Cambodia. For certain other countries, including Ukraine, you can get your payments, but only if you meet certain conditions such as appearing at a U.S. embassy or consulate every six months.</p> <p>The Social Security Administration offers the <a href="https://www.ssa.gov/international/payments_outsideUS.html" target="_blank">Payments Abroad Screening Tool</a> to help you figure out if you'll be able to collect payments overseas.</p> <p>If you are a non-U.S. citizen receiving Social Security because you worked in the U.S. or are a dependent of someone who did, the rules on receiving payments overseas are more complicated. Consult the SSA booklet, <a href="https://www.ssa.gov/pubs/EN-05-10137.pdf" target="_blank">Your Payments While You Are Outside the United States</a> for the full story.</p> <p>Many American embassies worldwide have a <a href="https://www.ssa.gov/foreign/foreign.htm" target="_blank">Federal Benefits Unit</a> to help retirees with any Social Security issues.</p> <h2>3. Hire a new financial adviser</h2> <p>The wave of Americans retiring abroad has given rise to a new specialty in the financial industry: Cross-Border Planning. A cross-border specialist will help you understand local income tax laws so you don't risk over- or underpaying. They can also help you safely move spending money from the U.S. to your new home, and guide you through many other issues you might never have considered.</p> <p>It's almost impossible to find someone who knows the laws of every country, so use the <a href="http://crossborderplanning.com/about_us.htm" target="_blank">Cross-Border Financial Planning Alliance</a> to find someone who specializes in your chosen country.</p> <h2>4. Figure out what to do with your bank accounts</h2> <p>You should keep your U.S. bank account open to handle any expenses and bills you have stateside, and open another one in your new home country. Ask your U.S. bank if they charge a fee for making withdrawals from foreign automatic teller machines; if they do, you might want to upgrade your account or change banks before you move.</p> <p>For your foreign account, Expat Info Desk recommends choosing a large, well-known bank and transferring your money using an international currency exchange service. These are companies that transfer large amounts of money to an account in a foreign country, and they may offer a better conversion rate. Another option is to ask your home bank if they operate in your destination country.</p> <p>If you have more than $10,000 worth of assets in foreign accounts, the IRS notes you must report this to the U.S. government every year by filing a Report of Foreign Bank and Financial Accounts (FBAR) or face penalties of up to $100,000.</p> <h2>5. Stay on good terms with the U.S. Department of Treasury</h2> <p>Even though you no longer live in the U.S., if you maintain citizenship, you need to pay taxes. The Internal Revenue Service offers guidance on how and when to <a href="https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad" target="_blank">file a tax return from overseas</a>.</p> <p>Don't imagine that you'll be out of sight, out of mind to the U.S. government. In fact, it's actually more important for you to pay up than it is for citizens living at home, because if you owe more than $50,000 in delinquent payments, you could lose your passport.</p> <h2>6. Get online</h2> <p>Although mail service is unreliable in some parts of the world, internet connections are nearly ubiquitous. Even if you have always used paper statements and written checks before, now is a good time to embrace online banking to avoid delays and the cost of international postage.</p> <h2>7. Rent a home, then learn about buying</h2> <p>The Australian Expat Investor suggests renting at first, unless you have already been visiting your new country for years and are sure you're there to stay. You'll need to learn about the rules for tenancy in your new country. Don't be surprised if you have to pay an entire year's rent in advance. Even if you don't actually sign a lease before you move abroad, you should put aside the money you'll need and find out how to transfer it.</p> <p>Once you're established in your new country, look into whether purchasing a home might be a good financial move. It could cut your costs and serve as an investment if the local property market is on the upswing. (See also: <a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in?ref=seealso" target="_blank">How to Choose the Perfect Country to Retire In</a>)</p> <h2>8. Tap your U.S. home for income or capital</h2> <p>If you'll be leaving behind a home you own, you may not want to sell it at first. But you could consider renting out all or part of it. Some retirees use Airbnb to flexibly get income from their U.S. home, while reserving its availability for when they come back to visit. (See also: <a href="http://www.wisebread.com/5-easy-ways-to-make-good-money-from-airbnb?ref=seealso" target="_blank">5 Easy Ways to Make Good Money From Airbnb</a>)</p> <p>If you want to refinance your U.S. property to get money to buy a home overseas, look into doing that before you go. Homeowners who try to refinance from overseas may face a lot more confusing paperwork and hurdles.</p> <h2>9. Make an estate plan</h2> <p>If you have never made a will or considered putting assets in a revocable trust, talk to an estate attorney before you go, and get this taken care of. Find a lawyer who is knowledgeable about handling such things while living abroad, so they can advise you on whether your U.S. will can provide for distributing foreign assets, or if you'll need a second will created in your new home country.</p> <p>If you already have an estate plan, consult an attorney to see if any amendments will need to be made to cover assets located abroad.</p> <h2>10. Make a health care plan</h2> <p>Health care tends to be one of the greatest expenses in retirement. And unlike Social Security, you will not be able to use your Medicare benefits overseas. One decision to make is whether to enroll in Medicare anyway, so that it's still available to you on visits home or if you need to return to the States unexpectedly.</p> <p>Since most people don't have to pay a premium for Medicare Part A, which covers domestic hospitalization, some nursing home care, and hospice care, keeping that is a no brainer. Should you also pay for Medicare Part B, which helps pay for doctor visits and some prescriptions, among other expenses? That depends on how likely it is that you will ever return to the United States. If you don't carry Part B, and you must return because you become disabled and need help from your children, for example, you may have to go without coverage for months while waiting for the annual enrollment period, and you may also face premium penalties.</p> <p>Since Medicare is off the table for any care you need while overseas, you'll need to plan for financing that. Fortunately, health care in other countries is less expensive than it is in the United States. For example, the average per capita medical spending in Mexico is just over $1,000, compared just under $10,000 in the United States, according to the Organization for Economic Cooperation and Development. So paying for health care expenses out of pocket or buying local insurance or a hospital membership plan may be reasonable, with many expats saying they pay under $100 a month.</p> <h2>11. Buy insurance for everything else</h2> <p>Besides your health, you'll also need to insure your property. Understanding what insurance local laws require may be a lot harder in other markets than it is in the United States. It's a good idea to consult your local real estate agent about what insurance policy to get.</p> <h2>12. Get a financial power of attorney</h2> <p>You may need an adult son or daughter, or other representative, to make financial moves in your place while you are overseas. It's a good idea to leave them with a financial power of attorney document so that they can sign for you, for example, while selling property or other investments. (See also: <a href="http://www.wisebread.com/what-is-power-of-attorney?ref=seealso" target="_blank">What Is Power of Attorney?</a>)</p> <h2>13. Make an exit plan</h2> <p>Some retirees plan to enjoy their new home country while their health lasts, then return stateside if they become ill or disabled. If that's you, you'll want domestic long-term care insurance, and/or a nest egg in U.S. accounts to live off when you return. (See also: <a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it?ref=seealso" target="_blank">Is Long Term Care Insurance Worth It?</a>)</p> <p>Even if you plan to live in the new country for the rest of your life, if you want your remains returned to the U.S., you'll need to plan for that. Look into emergency evacuation/repatriation insurance to help with medically equipped flights home or transportation of remains.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F13-financial-steps-to-take-before-retiring-abroad&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F13%2520Financial%2520Steps%2520to%2520Take%2520Before%2520Retiring%2520Abroad.jpg&amp;description=13%20Financial%20Steps%20to%20Take%20Before%20Retiring%20Abroad"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/13%20Financial%20Steps%20to%20Take%20Before%20Retiring%20Abroad.jpg" alt="13 Financial Steps to Take Before Retiring Abroad" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/13-financial-steps-to-take-before-retiring-abroad">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico">How Almost Anyone Can Afford to Retire in Mexico</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them">5 Retirement Struggles Nobody Talks About — And How to Beat Them</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries">Retire for Half the Cost in These 5 Countries</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-travel-in-retirement-keeps-you-young">6 Ways Travel in Retirement Keeps You Young</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad">Don&#039;t Let These Expenses Spoil Your Retirement Abroad</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel expats foreign countries health care long term care retiring abroad social security Mon, 20 Nov 2017 09:00:07 +0000 Carrie Kirby 2056087 at http://www.wisebread.com 6 Ways to Make a Snowbird Retirement Affordable http://www.wisebread.com/6-ways-to-make-a-snowbird-retirement-affordable <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-make-a-snowbird-retirement-affordable" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/the_cost_of_retirement_happiness.jpg" alt="The cost of retirement happiness" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When the frosts roll in and a chill begins to descend, that&rsquo;s the signal for many retirees to begin their annual escape to warmer climates. This yearly migration that people make to spend the colder months in sun-kissed destinations has led to them being referred to as &quot;snowbirds.&quot;</p> <p>Though joining them might seem like an expensive proposition, you can actually end up financially ahead. Depending on the location you choose and how long you spend there each year, you may be able to reduce your income tax bill. And if you own property, there are ways of using that to your financial advantage, too. Here are six tips for affording the snowbird retirement lifestyle.</p> <h2>1. Head overseas</h2> <p>One traditional snowbird move is to head to a southern state like Florida, Texas, or Arizona in search of warmer weather. But an alternative is to look a bit farther afield and consider easy-to-reach destinations overseas. By spending your winters abroad in countries where your dollar stretches a lot further, it&rsquo;s possible to reduce your costs significantly for the period you&rsquo;re away.</p> <p>Popular retirement hot spots include Mexico, Costa Rica, Nicaragua, Panama, and Ecuador, which generally have good climates year-round. Many also have established retirement and snowbird communities you can join while you&rsquo;re there. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <h2>2. Take advantage of any tax opportunities</h2> <p>One of the reasons that some states have become particularly popular with snowbirds is because of their favorable tax regulations. By switching your residency to a no-tax state like Florida or Texas, you could save on state taxes. But you need to inform yourself about the laws surrounding tax residency in both states in which you reside.</p> <p>For example, Florida requires you to spend 183 days a year in-state in order to be considered a resident. But if your other home is in a high-tax state, that state probably doesn&rsquo;t want to lose you as a taxpayer. So you may also need to establish that you&rsquo;ve moved your bank accounts, driver's license, and voting registration to Florida. Or, you may need to prove that your bigger home is in Florida, or that you derive more income from the Sunshine State. All of these are ways of proving that your main domicile is in Florida.</p> <p>If you&rsquo;re audited and tax officials deem you have not been paying the appropriate state taxes, you could be subject to back taxes, plus interest and penalties. It&rsquo;s really not worth the risk, so be sure you&rsquo;re up to speed on residency tax laws.</p> <h2>3. Rent out your property</h2> <p>Many snowbirds opt to buy a property in their winter location and maintain their old property in the place where they will spend their summers. If you own property in either location, it may be possible to make money by renting it out when you&rsquo;re not there.</p> <p>Though a yearlong lease won&rsquo;t be an option for you, there are other ways to rent out your property. You can offer short-term rentals through sites such as <a href="https://track.flexlinkspro.com/a.ashx?foid=1029882.138770910&amp;foc=1&amp;fot=9999&amp;fos=1" target="_blank">Airbnb</a> and <a href="https://track.flexlinkspro.com/a.ashx?foid=1029882.138783233&amp;foc=1&amp;fot=9999&amp;fos=1" target="_blank">HomeAway</a>, and hire a property manager to oversee cleaning and maintenance. Depending on the location and style of your home, you may be able to make a significant amount in rental income.</p> <p>If you&rsquo;re using multiple platforms to rent out your properties, you can use services like <a href="https://www.guesty.com/" target="_blank">Guesty</a> to manage and keep track of the bookings, analytics, and communications. (See also: <a href="http://www.wisebread.com/5-costly-pitfalls-of-hosting-on-airbnb?ref=seealso" target="_blank">5 Costly Pitfalls of Hosting on Airbnb</a>)</p> <h2>4. Pick up a side hustle</h2> <p>Starting a new career when you&rsquo;ve just retired may not be quite what you had in mind, but I&rsquo;m not talking about a full-time job. If you can find something part-time that will supplement your income, it could make a big difference in your quality of life or provide you with any extra funds you may require to make your snowbird dream a reality. (See also: <a href="http://www.wisebread.com/6-great-retirement-jobs?ref=seealso" target="_blank">6 Great Retirement Jobs</a>)</p> <p>One option is seasonal work during the summer and winter holidays. You might even be able to find part-time positions in both locations that are recurring each year, providing you with some stability and a regular income. Bear in mind that any extra income you earn through work will affect your tax bill, so you&rsquo;ll have to figure out whether it&rsquo;s beneficial overall. (See also: <a href="http://www.wisebread.com/9-great-jobs-for-snowbirds?ref=seealso" target="_blank">9 Great Jobs for Snowbirds</a>)</p> <h2>5. Downsize your home</h2> <p>Many retirees still live in homes where they brought up children, and those houses are now far larger than they need. It may be possible to downsize, purchase two smaller properties, one in each location, and perhaps even make a little extra on top.</p> <p>Even if your intention is to rent in one of the locations, downsizing and selling your property may still be an idea worth considering if it would eliminate an outstanding mortgage. A smaller living space could also save you on upkeep and maintenance costs, and mean lower utilities bills as well. (See also: <a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire?ref=seealso" target="_blank">12 Money Moves to Make the Moment You Decide to Retire</a>)</p> <h2>6. Time it right</h2> <p>Many snowbirds drive their cars or recreational vehicles from one location to another. But some fly to their winter destination, especially if it&rsquo;s overseas. If you&rsquo;re flying, it&rsquo;s best to allow yourself some flexibility around exactly when you make the move so that you can save on airfare. Try to avoid flying at peak times like school breaks and religious holidays, and plan ahead as far in advance as possible. (See also: <a href="http://www.wisebread.com/10-flight-booking-hacks-to-save-you-hundreds?ref=seealso" target="_blank">10 Flight Booking Hacks to Save You Hundreds</a>)</p> <h2 style="text-align: center;">Like this post? Pin it!</h2> <div align="center"> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <div><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Ways%20to%20Make%20a%20Snowbird%20Retirement%20Affordable.jpg&#10;" style="float: left; width: 29%; margin-right: 3%; margin-bottom: 0.5em;" alt="" /></p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Ways%20to%20Make%20a%20Snowbird%20Retirement%20Affordable%20%282%29.jpg" style="float: left; width: 29%; margin-right: 3%; margin-bottom: 0.5em;" alt="" /> <img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Ways%20to%20Make%20a%20Snowbird%20Retirement%20Affordable%20%281%29.jpg" style="float: left; width: 29%; margin-right: 0%; margin-bottom: 0.5em;" alt="" /></p> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/6-ways-to-make-a-snowbird-retirement-affordable">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-smart-reasons-to-retire-abroad">7 Smart Reasons to Retire Abroad</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-retirement-hotspots-that-are-cheaper-now-than-ever-before">9 Retirement Hotspots That Are Cheaper Now Than Ever Before</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-exciting-overseas-winter-vacation-destinations">3 Exciting Overseas Winter Vacation Destinations</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-secrets-from-the-worlds-most-frugal-frequent-travelers">25 Secrets From the World&#039;s Most Frugal Frequent Travelers</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-exotic-yoga-retreats-anyone-can-afford">5 Exotic Yoga Retreats Anyone Can Afford</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel affordable retirement snowbird snowbird retirement travel tips winter getaways winter travel Thu, 16 Nov 2017 09:30:09 +0000 Nick Wharton 2054957 at http://www.wisebread.com