Seniors

Social security scams are common, as they prove lucrative for scam artists. Not only can such individuals trick seniors into sending money for alleged services, but they can acquire personal information that can lead to identity theft . Here are a few scams that have fooled many.

Direct Mail Scams

Some seniors have reported receiving letters on letterhead allegedly from the social security office informing them they have an extra check awaiting them. The letter then asks seniors to provide personal information and a “filing fee.” The thieves often ask for the recipient’s bank account information and social security number. Note that while the Social Security Administration often sends legitimate mail, they will not ask you for information that they already have, such as your social security number. They also do not require fees. Any suspicious letters should be followed up on with the local social security office before taking any action.

Phone Scams

If someone is asking for your social security number or personal details on the phone, chances are it’s not safe. A good rule is to never provide personal information over the phone. If for some reason it appears necessary, seniors can always call the Social Security Administration and ask for details about the request.

Internet Scams

A common form of social security scam is when thieves send an email stating that seniors social security information needs to be updated. The person is told to click on a link, which takes him to a webpage that has been carefully constructed to resemble the authentic government website. There, the senior is directed to enter personal information such as his social security number and bank account information.

A good rule of thumb is to always verify any requests for personal information that do not originate from a phone call initiated by the senior. Since such information is almost always the goal of these scams, seniors should always be suspicious when anyone asks for it.

It’s better to be safe than sorry, and social security officials are likely to be understanding when seniors ask for verification of requests for such information.

Traveling to another country and experiencing a health problem is no fun. Unfortunately, the likelihood of getting injured or coming down with a bug often increases when one travels, due to the fact you are engaging in new activities and being exposed to unfamiliar bacteria. Without the right travel insurance, it can turn into an absolute nightmare. While some countries provide quality inexpensive health care or have reciprocal agreements with the United States, this is not typical.

At the very least, your travel insurance should provide for emergency medical treatment. This should include room and board at the hospital and ambulance services in addition to fees for the emergency treatment self.

Ask your insurance agent about adding extra benefits to your travel insurance. Some insurers, for example, offer the coverage so that family members can afford to fly to be at your side in the event of an accident.

Emergency medical evacuations can cost over $100,000, depending on which country you’re being evacuated from. If you will be traveling to a country  that doesn’t have the standard of medical care you feel comfortable, adding this coverage to your travel insurance is an absolute must.

If you intend to travel to a political hot spot, make sure your insurance includes injuries resulting from an act of terrorism. Not all insurance covers medical problems or property damage resulting from such events, so it is worth it to double check.

When purchasing travel insurance, don’t forget about coverage other than medical. Consider purchasing insurance that provides for trip cancellation as well as loss of baggage and other personal effects.

Finally, make sure your travel insurance covers preexisting medical conditions, as the last thing you need to happen is to get to Casablanca and discover that your insurance doesn’t cover blood sugar issues that have arisen from the combination of your diabetes and the consumption of too much couscous.

Don’t be shy about asking your agent about all of these factors before making a decision.  They will be happy to help you find the policy that is right for you and your travel needs.

If you’re past traditional retirement age but unwilling to give up the 9-to-5, you’re not alone. According to a study from Merrill Lynch and Age Wave, 72 percent of pre-retirees over the age of 50 say their “ideal retirement” picture will include a job. Forty-seven percent of current retirees have worked or plan to seek employment during their golden years.

Interestingly, the study also found that 52 percent of working seniors took a break between their pre-retirement job and post-retirement work. These sabbaticals averaged 2.5 years, and usually required the retiree to conduct a new job search—a process often fraught with mistakes no matter one’s age. Consider the following errors common among those over the age of 50—and how to avoid making them.

Losing connections – You held a career for multiple decades and now you want to relax for a while. No one says you can’t, but if you intend to seek part or full time work after some time off, you’ll want to stay visible and connected in your industry while you do so. Keep in touch with former colleagues and use social media to build new relationships. You might even want to take on a little consulting work; it could lead to a new job when you’re ready.

Avoiding the Internet – These days you need an online presence if you want to land almost any job. While this doesn’t mean you have to spend all your free time writing Facebook posts or Tweets about your day, a LinkedIn profile is a valuable job search tool every senior should have. In fact, in one survey, 94 percent of the HR professionals questioned said LinkedIn was their number one source for recruiting candidates.

Writing a book instead of a resume – In most professions, a resume more than one page in length is going to overwhelm (or worse, turn off) the people doing the hiring. Experts have said that recruiters spend only 20 to 30 seconds scanning the resumes they receive, so limit yourself to the last ten years, make ample use of bullet points, and use data-based examples (such as “lowered department overhead 45 percent”) to illustrate your accomplishments.

Using an old email account – If you’re still sending out resumes from an AOL or Yahoo email address, potential employers are going to assume you’re behind the times. Create a new account using Gmail or Outlook. You can name it whatever you want as long as it’s not already taken—just keep it professional. To get you started, consider an email address that contains your name and profession, such as “robertwhitesales” for example.

Being a salary stickler – Sure, it might feel insulting to be offered less than you were making before you retired, but there are negotiating tactics you can use to beef up your compensation without demanding a specific dollar amount. For example, ask for the work schedule you want, flex time, more personal days and other benefits that will enable you to continue enjoying more of your retirement after going back to work.

Life expectancy in the U.S. recently hit a new high. According to the National Center for Health Statistics, it’s currently 78.8 years on average—or 81.2 years for females and 76.4 years for males. That’s great news—unless you’re struggling to put money way for retirement. The longer you live the more you’ll need, though there are ways to stretch your nest egg a little further. Consider the following suggestions to help you avoid outliving your retirement savings.

Overestimate your lifespan. Unfortunately, many retirees underestimate how long they’ll live by at least five years—saving less aggressively as a result. They also overestimate how much they can withdraw each year without dangerously depleting those savings. They wind up living on social security and the charity of family and friends.

When calculating your retirement savings needs, it’s best to err on the side of caution and plan to live longer than even your doctor expects you to. Then you’ll be able to make a more informed decision on how much you can spend each year. The advice of a financial planner can be a big help.

Choose a safe pace for withdrawals. Even just a few years ago, many experts considered withdrawing 4 percent each year to be safe. That meant if you had $1 million in your retirement account, you could take out $40,000—plenty for a senior to live on. Your nest egg would last at least 30 years as a result.

Unfortunately, low interest rates, combined with the potential for lower returns in today’s market environment, require an even more cautious approach. You’ll find experts advocating initial withdrawals of 3 percent per year or even less.

Consider an income annuity. Also known as immediate annuities, income annuities involve depositing a lump sum of cash with an insurer who then sends you a monthly payment—for as long as you live—that is not based on market performance. You can check out current annuity rates at www.immediateannuities.com. A 65-year-old woman would receive close to $800 per month for a $150,000 investment at today’s rates.

Of course, when you purchase an immediate/income annuity, you essentially give up access to your money. You cannot tap it to pay for unexpected expenses, nor can you leave it to your heirs. Seek the opinion of a trusted financial advisor before buying.

Take a personalized approach. With the help of a financial planner, you should be able to customize your retirement savings and withdrawals to take advantage of the upsides of various strategies while avoiding their downsides. For example, you could try to cover essential retirement expenses with Social Security and then make up the difference with an immediate annuity—covering discretionary outlays with draws from the remainder of your savings.

This will give you the flexibility to react to changing retirement needs and market conditions—reducing both the chance that you will outlive your nest egg and the possibility that you’ll still be sitting on a big pile of cash when you finally pass on.

Whether you’re still preparing for retirement or have already embarked on that great journey, we’re here to help. Please don’t hesitate to contact us whenever you need retirement planning or other financial advice.

Saving for retirement can be complicated. However, if you think the tough decisions are over once you’ve collected your final paycheck, you’re wrong. Tapping into those retirement savings takes just as much careful planning. Withdraw too much too soon and your nest egg will shrink too quickly. Use too little and you may be unnecessarily forgoing a comfortable lifestyle. Then there are the tax implications of every withdrawal decision… you get the picture.

Fortunately, we’re here to help. Consider the following money-saving withdrawal strategies. And please don’t hesitate to contact us for assistance with any aspect of retirement planning.

Strategy 1: Curbing Taxable Income

Not only does keeping taxable income low mean you’ll pay less of it in taxes, but it can also lead to savings in other areas—like healthcare. If you buy health insurance through an exchange, a lower income will qualify you for a larger subsidy. That can mean saving a bundle on your premiums. Talk to your financial advisor about the income limits and available subsidies in your state.

Strategy 2: Delaying Benefits

Even if you choose to retire early, delaying the collection of Social Security benefits until you’ve reached official “full retirement” age can be a very smart strategy—especially if you have plenty of other retirement savings. Sure, depending on your actual age, you may have to pay income taxes on withdrawals from tax-deferred accounts. However, your Social Security benefits will increase approximately 8 percent for every year you delay your claim. Talk to your financial advisor about the best time to begin collecting on Social Security.

Strategy 3: Plan for Withdrawals in Advance

Maybe you want to keep working until you’re 75. That doesn’t matter to your IRA and 401(k) accounts. As soon as you turn 70.5, you have to begin taking mandatory withdrawals from these tax deferred accounts and paying associated income taxes. If your tax bracket is likely to be higher at that time than it is when you’re in your 60s, you might be better off making larger withdrawals earlier. Your financial advisor can help you weigh the costs and benefits.

Strategy 4: Don’t do Anything without a Financial Advisor

A knowledgeable financial advisor is essential no matter what your strategy. He or she can help you move money around to reduce your future taxes on savings and earnings as well as plan your withdrawals to enable you to retain subsidies, keep your Medicare premiums low and live the retirement lifestyle you desire.

Good things often get better with age, and for many Americans, retirement can be the most enjoyable years of their lives. Not only does it provide you with time to relax, unwind and pursue new dreams, but also the opportunity to reconnect with your spouse and family—unless you’re faced with financial worries. Fortunately, a reverse mortgage can restore shine to the golden years of cash-strapped seniors. According to the Consumer Financial Protection Bureau (CFPB), lenders originate about 70,000 of them annually—and they expect that number to increase.

Reverse Mortgage Basics

The most common reverse mortgage programs are the Federal Housing Administration’s Standard and Saver Home Equity Conversion Mortgages (HECM). These are special loans designed for senior homeowners that enable you to convert a portion of your home equity into cash. The proceeds of the loan do not need to be repaid until you sell, move or your heirs inherit—in which case your estate has six months to settle the balance. Should they choose to sell instead, the lender absorbs the loss if the home goes for less than the amount owed. If it sells for more, they will inherit the difference.

Reverse Mortgage Requirements

To qualify for a reverse mortgage, at least one homeowner must be 62 years old. You must own your home outright or have enough equity to pay off the previous mortgage balance with the proceeds. While there are no income or credit score requirements, you may only take a reverse mortgage on your primary residence. This means you must live on the property for the majority of each year. You must also keep up with property tax and insurance payments as well as maintain the home’s condition.

Reverse Mortgage Proceeds

The amount you’ll receive from your reverse mortgage depends on a number of factors including your age, your appraised home value, the current interest rate and the program’s lending limits. For example, older seniors with more valuable homes usually receive more. Those who choose the HECM Saver program will receive less than those who choose the HECM Standard as the former has lower lending limits in exchange for lower fees. Regardless of program, you can take your disbursement as a lump sum at time of closing, as equal monthly payments for a fixed number of years, or as a line of credit.

Reverse Mortgage Costs

Reverse mortgages are quite expensive, with substantial upfront costs and higher interest rates than those you’ll find on purchase loans. While the upfront mortgage insurance premium on the HECM Saver is lower than that of the HECM Standard, other fees are comparable between programs. That said, you should shop several lenders to secure the lowest origination and servicing fees, closings costs and interest rate for the program you choose.

Other Important Considerations

Before obtaining a reverse mortgage, consider your age. According to the CFPB, more seniors are taking out reverse mortgages at younger ages. Unfortunately, doing so increases the risk that you will owe more than home is worth if you fall on hard times and need to sell. This can result in foreclosure. Additionally, if your spouse is younger than 62, make sure you can add him or her to the mortgage once he or she reaches the required age. If you are unable to do so, the reverse mortgage will become due when you die, leaving your spouse holding the bag.

A reverse mortgage should be a last resort as part of a broader financial strategy. Consider other options including downsizing, a home equity loan or a cash-out refinance before making your decision. If you choose one of the HECM programs, you will receive counseling prior to closing. While the opinions of the counselor should be unbiased, it would be wise to consult a trusted financial advisor before signing on the dotted line.