June 22, 2019 – We have been posting on Facebook about some of the most likely places to retire as we continue our tour of Scotland and a little bit of Ireland. These posts will give you a little hint of what it might be like to retire there, mostly because of the photos.
Very soon we will have a summary feature that covers places to retire in Scotland, how possible it is for non-Brits, cost of living, and more. But in the meantime, follow us on Facebook where you will find posts not only about Scotland, but links to all of our newsletters and other interesting retirement news as well. See our Mini-Retirement Guide to Scotland as well.
June 16, 2019 — Most of retirement age America, with the possible exception of our elected representatives in Washington, D.C., has some inkling that Social Security retirement is facing big benefit cuts as early as 2034. The commonly held reason why is that are too many baby boomers collecting their Social Security retirement checks, with too few millennials and Gen Xers paying into the system to keep it in balance. While that is not inaccurate, there is another, more fundamental reason for the shortfall, which dates back to the beginning of the Social Security program.
When the program started in the 1930’s there was an intrinsic problem. Half of the working population at the time was at least halfway towards retirement age. Yet because the program was new, no one had yet contributed anything into the system. It was decided that these Depression-era workers would be given full benefits anyway. Enough money was being collected that benefits could be paid as these workers retired. So they essentially had a windfall – they collected far more than they ever paid into the system. The benefits paid to them would ordinarily have been paid into the trust fund reserves, forever reducing the trust funds. In retrospect, it might have been better to have funded the shortfall from the general treasury at the time.
June 9, 2019 — America’s seniors are a little bit healthier than they were a few years ago, even though obesity and excessive drinking are on the rise. America’s Health Rankings; put together by the United Health Foundation, an affiliate of UnitedHealth Group, and the Gerontological Advanced Practice Nurses Association, rated the states with the healthiest people over 65. Some of the states that ranked the highest were a bit surprising.
Top ranked for the healthiest older people ranged geographically all over the country: Hawaii, Utah, Connecticut, Minnesota, and Colorado. States in the South brought up the rear: Mississippi, Kentucky, Louisiana, Oklahoma, and West Virginia. Rhode Island earned most improved honors, going from #30 to #7. Going in the unhealthy direction were Kansas and Nebraska, which both fell 10 places, from 18 to 28 and 13 to 23.
June 2, 2019 — The number one Google search about retirement is “How much do I need to retire”. Or, phrased slightly differently, “how much can I spend in retirement”. It is a tough question, dependent on a lot of factors unique to you. The short answer is: “a lot more than you thought”.
We liken the problem to a maxim our old friend Ralph came up with on a fall camping trip. After a night when the temperature dropped, the fire died down, and we ran out of firewood well before bedtime, he came up with the solution for the next campfire. Before it gets dark go out and collect about as much wood as you think you will need. Then go back out and gather at least that same amount again…. now you will probably be OK!
Here in this article we will address how to identify how much you need to retire comfortably. We want to stress that people usually underestimate two related things: how much is needed, and how long they will live. To be safe, keep Ralph’s maxim in mind. We will also explain the major withdrawal techniques, and provide a list of the situations that cause people to underestimate their needs.
How much do you need – the budget
The lifestyle you plan to live will determine how much you need. Step 1 is to figure out how much you are spending now, and estimate how that might change once you retire, including estimates for future medical expenses. You probably won’t spend a whole lot less than you do now, particularly if plan to travel a lot. If you make big changes to where you live, those expenses might go down a lot.
May 29, 2019 — We are grateful to Brigitta for suggesting this article on the pitfalls to look out for when buying a home in the Southwest. Here is what she wrote a while back:
“I’ve been receiving your newsletter for a couple of years. However, I don’t think I’ve ever seen an article about the differences in building practices in different areas of the country. By that, I mean as someone who has lived my entire life on the east coast, I am quite familiar with how homes are/were built going back to the 1700s when my area was settled. I’m also familiar with the types of “pests” and environmental issues, i.e., radon, asbestos, buried oil tanks (for heating) that that NJ homeowners look for. Now, I am interested in purchasing a home in AZ and I realize I don’t know ANYTHING about typical building practices- pro/con, types of homes that one might want to stay away from or might WANT to consider, pests typical to the area, environmental issues, etc as I do about the east coast. ”
Thanks Brigitta! It is such a good question we will expand this “pitfalls” article to the Southeast and Florida as well the Southwest, since these are the most common places for retirees to be moving to, and where they tend to lack buying experience. As always, we are hoping for additional Member Comments to make sure we address all the important risks to worry about.
The desert and mountains present inherently different hazards to those found in the Southeast. The Southwest’s powerful sun and high temperatures present other differences. This first section will discuss the home buying hazards that can exist in the Southwest. Although many problems in a home can be corrected if you spend money and time, but it is always nice to find a property that doesn’t need work.
Flooding is possible in the Southwest, especially in areas of low elevation and along large rivers. Geological hazards, including avalanches, earthquakes, landslides, and rockfalls, also occur throughout the Southwest, especially where there is rugged, mountainous terrain. FEMA maps can help alert you to those areas.
May 25, 2019 — The Democratic lead House of Representatives passed a bill this week, the Secure Act of 2019, that would make major changes to 401(k) plans. If it goes into law those changes could have a very positive effect on retirees and people who hope to retire someday. Since neither the Senate nor Pres. Trump seem to have any major objections, the bill seems to have a very good chance of becoming a reality.
The law has come into being as a reaction to a number of factors including a recognition of the growing importance of 401(k) plans, as well as the increasing longevity of Americans dependent on those plans for their financial security. Here are some of the many changes in the Secure Act of 2019, which passed by a whopping 417-3 margin:
Required Minimum Distributions (RMDs) not required until age 72 (currently required at age 70 and 1/2)
Granting companies with 401k plans permission to offer annuities as an investment option
Employers must disclose on 401(k) statements the amount of sustainable monthly income the employee’s balance would support
Part time workers would be allowed to participate in 401(k) plans
Unaffiliated companies could band together to offer 401(k) plans
May 22, 2019 — An interesting new book by Joseph Coughlin, founder of the AgeLab, pinpoints the many contradictions marketers face when targeting the senior market. In The Longevity Economy”, Coughlin finds that while builders build out housing inventory intended for baby boomers, the market is constrained. That is because eighty-seven per cent of retirement-age people want to stay where they live now – the homes where they experienced the three ‘M’s: marriage, mortgage, and memories.
Coughlin says the problem with that preferenced is that they can’t continue to live there. “Not when the model is a two-story house with a bedroom and the bathroom upstairs. If we can solve the stairs problem, we won’t need new housing.”
Part of the issue is that we are living longer than ever, and our coping skills don’t always keep up. Coughlin says that having simple answers to two questions can determine whether you’re going to age well in place:
“Who’s going to change the light bulb, and how are you going to get an ice-cream cone?”
It might seem a little silly, but it does get at the problem. If you can find solutions to problems like those, you will be all set for a comfortable old age. If you can’t, problems await you!
A New Yorker article that reviews Coughlin’s book, “Can We Live Longer But Stay Younger”, points out many other contradictions that AgeLab has found while trying to help aging baby boomers. Marketers often find a solution to a problem, but can’t sell it. AgeLab studies find many products that could make life easy for us, but it they have a tinge of “senior” to them, they will languish on the shelf.
Comments: How are you going to solve the problems of who is going to change the lightbulb and how are you going to get an ice cream? Some day we will all face these problems. What kind of housing are you going to choose to prepare for what lies ahead?
May 21, 2019 — Possibly you are one of those baby boomers who can’t wait to retire and do all the things that your job wouldn’t let you do. If so, here is our list of 10 great places to retire where you can go, go, go from dawn to sunset, and maybe not even quit then!
By active we mean all kinds of things, not just sports. Your best retirement town might be in the mountains, where hiking and skiing is available in your backyard. It might be at the beach, where you can swim, sail, fish, or surf. Or maybe a vibrant community where you can catch a concert or play, get dealt into a bridge game, or find volunteer work – just about any day of the week. We gave extra points on this list for towns and cities that are walkable and have good biking, since we don’t consider riding around in our car active living. One thing is certain, it staying busy is your thing, there is a retirement town where you can be very happy.
Here is our 2019 list of the best places for an active retirement. We concentrated more on mid-sized towns and cities since just about every big city offers opportunities to stay active.
Madison, WI. The city boasts a 30-mile web of paved trails that are lit, snowplowed, and biked year-round. Beautiful lakes surround this walkable town. The University of Wisconsin and all its attractions. You can be busy all year round in Madison, a great place to retire.
May 14, 2019 — The government isn’t quite ready to slap warning signs on retirement contracts like it did on cigarette packages, but maybe it should. The Wall St. Journal recently reported on several studies showing that delaying retirement can improve your longevity. While most people look forward to pursuing their hobbies, traveling, and spending more time with the grandchildren, there are some downsides. Many folks watch too much TV, don’t exercise, and lack the mental stimulation to keep them sharp. The studies seem to find that policies that encourage people to keep working result in fewer health problems and longer lives.
According to a WSJ article, “The Case Against Early Retirement”, researchers for the Center for Retirement Research at Boston College, using an idea from a Dutch study, “concluded that delaying retirement reduced the five-year mortality risk for men in their early 60s by 32%”. Women experienced less of a mortality risk. The study in Holland used a series of increasing incentives to get workers to stay on the job longer.
May 11, 2019 — The National Association of Home Buyers (NAHB) reports that the market continues to be strong for 55+ homebuyers and renters. While many baby boomers will not be moving soon, there is a significant segment that is seeking a change in their living arrangements. “Overall, demand for homes in 55+ communities remain strong as more buyers and renters in that market search for simpler living arrangements,” said Karen Schroeder, chair of NAHB’s 55+ Housing Industry Council and vice president of Mayberry Homes in East Lansing, Mich. “However, there are still headwinds that are impacting the market, such as rising construction costs and a lack of skilled labor.”
Elsewhere, the Urbanland.uli.org site has an interesting article (referred to us by our own “Nomadic pilot”) that outlines the complexity of the 55+ homebuying landscape. There are many threads to the market. Many experts predicted there would be a mass selloff of suburban homes as aging boomers moved out, either to 55+ communities or urban apartments. While that has happened to some extent, there are still millions of boomers who continue to live where they always have.
Comments? What do you think is going to happen in the retirement housing market? Are you planning on changing where you live and the type of home, or are you staying where you live now? Please add your Comments below.