August 16, 2018

What Does a Satisfying Retirement Mean To You?

One thing has become abundantly clear in the eight years this blog has been published: there is no one answer to what a satisfying retirement looks like. What may have been a satisfactory answer just a few years ago, may no longer apply. The retirement landscape is continually shifting under our feet.

Even the idea of traditional retirement age is in flux. You have probably read the same headlines that I have: the "new" retirement age is 70, or 80, or not at all. At the same time, the Internet is filled with examples of folks who aim to retire at 40, or even 30. Retiring before a typical career has even begun seems to be the goal.

I guess we can conclude that retirement is a fluid idea and one defined by the person experiencing it, which is the point of this post. 

I'm pretty sure that all of us enjoy reading how others have done something: tackling a problem, making a decision about medical care, deciding where to live, hiring a personal trainer (!)...almost anything open to individual responses and decisions.

At least for me, I learn something every time a comment presents a new way of living, a different approach to something, or a fresh interpretation of what satisfies someone. 

So, here is your chance to help us all. What does a satisfying retirement mean to you? 

  1. How do you define a lifestyle that is satisfying?
  2. How have you changed your view on this issue over the last few years?
  3. Is retirement still a valid concept?
  4. What is the difference between a satisfying retirement and just being retired?
  5. Can a satisfying retirement include going back to work, either full or part time?
  6. If you have not retired yet, do you still believe you will be able to and be happy?

OK, your turn. Please don't feel compelled to answer all these questions, just the ones that mean the most to you. I am not going to answer from my perspective at this time, though I may take your comments and turn them into follow-up posts. I really want to get a sense for how you are mentally handling the re-positioning of retirement. What leads you to believe that you can craft a retirement that is satisfying? 

I get a strong sense that a majority are comfortable in where their life is at the moment. But, that doesn't include everyone, and it certainly doesn't mean a retirement that looks anything like the one your parents lived.

Fire away...and fill the page!

August 13, 2018

Are Personal Trainers and Coaches Worth the Money?

We all know the value of regular exercise. The problem for many (that's my face in the mirror) is maintaining any sort of exercise plan. Even if it involves just walking around the neighborhood for 30 minutes three times a week, we are good at finding excuses to skip a day.

Of course, there are plenty of retirees who can't engage in a typical exercise program due to physical limitations or family obligations, like watching a grandchild all day. I understand that occasionally life gets in the way and the best laid plans fly out the window.

For those able to exercise, motivation and commitment are two major hurdles. Certainly, I know folks who thrive on being as physically active as possible. Long bike rides, hiking, kayaking, snow skiing...these people need no extra push to keep their blood pumping.

For the rest of us, with me in the front of the line, maintaining a regular program designed to enhance our fitness and help delay some of the ravages of time, is too easy to abandon. 

I use the excuse that summers in Phoenix are too hot. Of course, that is silly: the gym is 5 minutes away. Or, I get engaged in writing a post and when I come back into focus the time to get physical has passed.

All excuses are very human. So, a reader suggested I ask you about the place a physical trainer or coach might play in the life of someone who needs the extra kick, the kick that comes from paying someone to prod you to do what you know you should. Coaches for improving one's golf game, music lessons, cooking classes...none of those seem unusual.

But, the thought of paying for a session with someone who job is to push you to exercise correctly seems very different. The cost is no more than for any type of lesson or class. If improving physical fitness is a laudable goal, then why not? Is a personal trainer just different somehow? 

My gym offers Silver Sneaker exercise classes that are free with my membership. Someday I may take advantage of what they offer. But, for now, the chair-based sessions or moving at half speed while lifting weights is not what I need. I need to be pushed a bit to achieve some noticeable goals. 

So, I ask you: do you use a trainer? Have you ever paid for someone to help with with an exercise program? Was the cost worth it? Where there any downsides?  Or, should I be able to motivate myself to do what is need to be done?


The second in a series of three new booklet-length resources is now available. Preparing For Your Active Life After Retirement is a guide to the most exciting journey of your life, the one that takes place after retirement.

Whether you are still working toward this new phase of your life, or already there, Preparing For Your Active Life should be one of the resources you consult.

August 9, 2018

Warning: How To Protect Yourself Online

Those of us over 65 are active users of the Internet. Estimates are that 66% of U.S. seniors use the Internet on a regular basis. Not unlike younger folks, a fair number of us are connected for a good part of the day, either through a computer or our smartphone, or both. We may not adapt to the latest technology as quickly as others. But, once something proves itself to be useful to us, we are not being left behind.

Of course, that means we are just as vulnerable to all the bad stuff that happens online. The latest figures I could find say that a new computer virus or malware program is created every 4 seconds. The absurdity of people finding new ways to hurt others at such a relentless pace is a subject for another post. This time, I'd like to focus on some practical ways we can protect our online selves.

This list is not exhaustive, but a good start. Please leave a comment with any other hints or warnings you have found to be important. One caution: I will not post any links to web site addresses. It is not beyond the realm of possibility that some spammer would add a link to a post about viruses that turns out to be infected!

1). Buy legitimate software from a recognized dealer or online merchant. This will be more expensive but is a basic safety step to take. While Ebay, for example, is a tremendous place for a lot of things, I would not buy software, new or used, from any merchant listed there. Garage sales? Same rule. 

2) Keep all software updated. Windows-based software is vulnerable to constant attacks. Updates or software patches to correct vulnerabilities are issued constantly. Apple is less vulnerable, but not immune. Keep everything up-to-date.

3). Never click a link in an email unless you are very sure it is safe. Friends can unknowingly pass along computer viruses. Social media links are notoriously risky. A link that takes you from one web site to another may not be what it seems. Look carefully at the computer address you are being redirected to. If it doesn't look legitimate don't click it.

4). Use anti-virus, anti-malware software on all your connected devices, including smartphones.  Keep them updated. Scan all your files on a regular basis. There are several good free programs that will protect you from most threats. For $40-$70 you can get more protection and more piece of mind. Your computer also comes with something called a Firewall. Be sure it is turned on and functioning.

5. Use pop-up ad blockers. Chrome, Edge and Firefox have add-ons that block a lot of the ads that appear on your screen. If they are not there you won't be tempted to click something that might be dangerous.

6. Use strong passwords. It is amazing how many of us still use passwords like, "12345" or "password." Even obvious choices like your birthdate or old phone number are simple for a bad actor to crack. A combination of upper and lower case letters, interspaced with random numbers and punctuation marks is best.

7. Back up important computer files regularly. It is best to use an external hard drive or cloud-based storage system. If you only back up files directly to your computer and it becomes badly infected, your stored files will do you little good.

8. Never, ever, take an online poll or answer questions about yourself on a social media post or smartphone app, like "answer these 10 questions to find out where you should live." You are giving away private information that could lead to a malware attack. At the very least, you are helping advertisers target you with a constant barrage of ads. One exception: I will occasionally add a poll to this blog. That one is safe!

9. Don't leave your computer connected to the Internet when you are not using it. That allows for the potential of someone entering your computer through your router and leaving something nasty. When you are finished using it, delete all your browsing history and shut it down---not just let it go into sleep mode, but turn it off.

10). Use the alert service offered by your banks and credit card companies. If your balance falls or an unusual charge is made with a credit or debit card, you will be instantly notified. That could be your first sign of some type of computer virus that is allowing others to steal your financial information.

11. If you do suffer a ransomware attack, do not pay. There will be no end to the demands and no guarantee the person will actually remove the damaging software. Immediately try the Control-Alt-Delete action to go to the Task Manager. Try to shut down the offending software. If that doesn't work, unplug your computer from the wall.  There are some things to try if you are computer savvy, but they are beyond the scope of this post.

Once you have calmed down, take the computer to a repair service, like the Geek Squad or Data Doctors. They may be able to wipe the offending ransomware from your system. 

We live in a strange world where very smart people spend their lives trying to make our lives unpleasant or dangerous. The best we can do is take precautions that will make the job of the bad people tougher.

August 6, 2018

Financial Sharing With Adult Children: How Much and When?

A few weeks ago a regular reader asked for some feedback on a question that was bothering her and her husband: 

"We are happily retired, and my husband & I know that we need to talk financial specifics with our adult children, but we seem to keep putting it off. And, yes, we know that *not* doing this will complicate their lives if we were to both die without doing it. So I would love to see a post & comments from others about how to handle this important conversation — when, how, what specifics and how much to disclose."

I have written about the need for spouses or life partners to share financial  details, duties, and information with each other. Since one half of a couple usually handles most of the money stuff, the other person could be in a terrible bind after the death or incapacitation of the "financial" person. If you haven't read one of the earlier posts, please start with Protecting your Partner's Financial Well-Being. The subject is much too important to put off until another day.

For this post I am going to shift my focus to the question asked by the reader. What about a couple's offspring: their adult children, through birth, adoption, or a blended family...what financial details should be shared with them? When? How? How specific? That is a great question I have not dealt with before. But, I have no fear in writing about it since I know your comments will be the ultimate guide.

From my perspective, I think the answer hinges on a few key realities:

1) How is your relationship with your grown children? (GC)

This may be the toughest question to answer because it is really asking about trust. Do you believe your adult children will do what is best for you if any of them have to handle your finances? Can you have productive conversations with your adult children about subjects other than finances? 

2) What are their financial situations at the moment and long term?

I would guess the financial stability of an adult child could enter into your consideration of how much you feel like sharing. Is there a chance you will be using some of your nest egg to help your children sooner rather than later? If so, they would probably feel more comfortable accepting your help if they knew you wouldn't be hurting your own retirement. That would require at least enough of an overview to raise their comfort level.

3) How old are your GC? 

Personally, I'd share less information with a GC in his or her 20's or early 30's than someone older. Why? A younger adult has to learn and experience some of the basics of financial decision making before being able to fully understand more complex arrangements. Of course, this really depends on the maturity level of the person in question. There are some young adults I'd trust to understand what I was explaining or how to handle my finances if I were unable to. But, that may be the exception.

4) Should any or all of the GC be actively involved in your finances now?

If yes, then certainly that person needs to know what you are working with. If you think you or your partner's ability to handle your investments and basic financial duties may be slipping, the amount you share could be substantial. If you are doing just fine, then there is no reason to put that extra responsibility on an adult child yet. Share enough to make him or her feel trusted and part of the long term plan, but don't cede control too early.

The legal paperwork involved in having someone execute your desires and to protect you should be in place, even if you choose not to share too many details right now. Power of Attorney and Living Will documents are usually the foundations of a solid financial plan. They give someone the legal right to manage your affairs and make decisions about your care before your death. Both can be modified or terminated at any time by you.

Having a Will prepared for after death is also crucial to avoid some probate issues or have a court decide how your financial affairs will be handled. With these in force, your grown children will need to have the details about not only what you want to happen but what resources you have to make all that happen.

Now, your turn. If you have faced the questions posed by the reader please tell us how you handled this situation. If you have grown children but haven't shared much, what is your thinking? Do you plan on bringing them into the loop in the future?

This is a fascinating area for discussion. It impacts you, your adult children, their children, your relatives' children..all sorts of folks will be impacted by how this situation is handled. I am really hoping for all sorts of feedback and guidance.

And, if this post raises some additional questions in your mind, leave them as comments and we will see what we can do together to come to some answers.

August 2, 2018

How To Decide When To Start Social Security

The Social Security Administration says that 21% of married couples and 43% of single seniors depend on Social Security for 90% or more of their income. 59 million Americans receive a monthly check, either for being over 65 or for a disability claim.

Those numbers tell the story: Social Security is important, or very important, to a large number of us. That leaves one of the key questions before the deposits start appearing in our checking account: when to start?

As I have written in earlier posts, there is no simple answer. Because there are so many variables no one can give you a fail-safe answer. Your best approach is to understand the factors that help you make the decision that right for you.

Let's start with the basis:

1. If you have worked at least ten years you are likely to qualify. The actual requirement is 40 credits, which occur at the rate of four for each full year of employment. Those 10 years do not have to be in a row, they just have to occur before you can claim benefits.

2. Your actual monthly benefit is based on your highest 35 years of earning. As point #1 above states, you don't have to work 35 years to qualify, but the amount you receive will be based on the highest income you earned if less or more than 35 years. This means lower earnings when you begin your career are usually replaced with higher earnings later in your employment history.

3. If you never worked, or not enough to get 40 credits,  you may still qualify for Social Security payments, either as the spouse of an employed person who does receive benefits, or because you qualify for disability payments. 

4. Deposits to your account run one month behind. When you sign up to start receiving payments, your first deposit will come the following month. Exactly when you receive your check each month is based on your birth date.

5. Social Security no longer sends physical checks through the mail. You must make arrangements for direct deposit. The other option is for your funds to be deposited into a special debit card that can be used like any debit card for purchases or to get cash at an ATM. 

Now, on to some of the fine print:

A. When you start receiving payments is up to you. The earliest is when you turn 62. The first payment will arrive the next month. Staring at 62 will reduce your monthly check by about 25% from what you would receive if you waited until you reach your full retirement age (FRA). For most of us that is 66. The FRA varies by your birth year, moving up two months for every year after 1954. So, if you were born in 1955, your FRA is 66 years and two months.

B. You can start receiving payments at any time after your 62nd birthday until age 70, at which point your check will be approximately 30% higher (depending on your exact FRA). There is no reason to wait past 70 since benefits do not increase after that date. You are just leaving money with the government that you will never get.

C. You lose $1 in Social Security benefits for every $2 you earn if you start before your FRA, continue to work, and earn over $1,420 a month. There is a different calculation in the year you reach your full retirement age that lessens this penalty.

D. After your full retirement age, there is no reduction in Social Security payments regardless of how much you earn.

E. Social Security benefits are taxed depending upon your total income and marital status. If you exceed the rather low minimums set by the government, between 50% and 85% of your Social Security income will likely be taxed. And, yes, your Social Security counts as part of your total income to determine if it will be taxable. 

Ok, so now that you have a grasp of the basis, when should you start taking the monthly benefits? Here is what to consider:

1. Do you need the maximum amount of payment to make your financial picture work? Do you have enough other income, or will you keep working until at least 70? If so, it is suggested you start Social Security when you turn 70. Your benefits will be at their highest level for the rest of your life. 

2. Do you need income now to keep things afloat or as additional income while still working? Start at 62 or any year after that until 70. Your check will be permanently reduced, but maybe not enough to make up for the loss of cash now. For example, I began taking payments at 64. Waiting until 66 would have meant only $132 more per month which didn't seem worth it. 

3. Spousal benefits require another calculation which is beyond the scope of this post. Basically, you can get an amount equal to half of your spouse's check, or your own amount if that is higher. Social Security will figure out the proper combination to insure your monthly check is the maximum allowed. Obviously, this benefit is not available to single folk.

4. If married and your spouse dies, there are other provisions to provide benefits based on the amount your partner was receiving. I have provided some links below if you'd like more details.

5. Divorced? There are rules for that, too. See the link below.

When your start your Social Security payments takes some thought and planning. Frankly, though, it is not as complicated as some financial experts like to make it. Start when receiving that monthly payment fits your current needs, situation, and future projections.

Any questions? Leave a comment or drop me an email and I will try to clear up any confusion!

Spousal Benefit Regulations

Widow/Widower Survivor Regulations

Divorced Regulations