You put in your dues by working hard over the last 20-30 plus years at the same employer. Perhaps you were a city worker. Maybe you worked for the county or the state. An increasing number of Seniors are beginning to question whether their retirement is enough. This is specifically the case when retirement depends largely on a pension.
If you are asking this question, you are not alone. The scale of municipal bankruptcies in recent years is staggering. Consider these filings:
Detroit, Michigan listed liabilities of $18 billion in its 2013 bankruptcy filing, the most ever recorded.
Lending money is one of the riskiest actions that Seniors can take. By lending money, you may be jeopardizing your own retirement. Furthermore, you may be reinforcing bad habits of your offspring.
Many retirees find that their children may at some point in their lives experience some form of financial hardship. These situations can test their ability to maintain their payments on household bills and installment payments on their financed assets.
You have been saving your whole life for retirement. These just might be the best years of your life as you finally have the time to travel, experience new things and spend time with family. In the back of your mind though, you may have recognized the toll that a serious or debilitating chronic illness or other incapacity might have on your nest egg. Many financial planners sell long-term care insurance, but is it really a good value to you?
Medicare covers many of the costs of medical care for seniors, but out-of-pocket costs do exist in addition to the so-called “doughnut hole” in Medicare Part D prescription drug benefits. But that’s not the only place where seniors end up paying.
Co-pays and other factors have limited the number of doctor’s visits, but so too has the economic down turn as a whole. Many seniors have investments that relied on the stock market, or even on real estate trusts. But how do you quantify what the “difficulty” is?
You could pay a financial advisers $100 or more per hour to tell you what you need to do to plan for your retirement and do so with fiscal security. Or you could pick up some tips on your own. We’ll let you decide what you want to do over the next 400+ words.
Let’s start with taxes. Most advisers say that the major point in favor of 401ks and IRAs are the tax breaks. One major issue is that you have to be at least 59 and 1/2 to withdraw them, or face a tax hit. So, unless you’re willing to withdraw in periodic payments, the IRS could really ding you, and take a big cut.
Defunded pension plans are a fact of life for many employees, and it would not be worth it to get into why companies can, and do, bow out of their obligations to worker who have been with them for years. Considering that it even includes state plans for a number of workers, it’s a truly growing problem.
Which makes it interesting that California is considering a state-run option for private sector workers. The Associated Press reports that the California Secure Choice Retirement Savings program would allow workers in the Golden State to get guaranteed benefits in return for employers withholding three percent of a worker’s paycheck. There would be insurance to cover any shortfalls, allege the bill’s proponents, but there’s one major problem.
Have you ever made an agreement with a family member, only to see it fall to the wayside as the years pass? Congress did the same thing with Medicare in the 1990s, but it’s now rearing its ugly head and could affect Medicare for many seniors.
Each year, Medicare payments are supposed to be cut somewhat, in line with inflation, to reduce costs of the largest healthcare system in the U.S. But each year, Congress usually passes a “fix,” meaning that the rate will increase for the next year. It’s now up to 27 percent, and with the debt super committee, physicians are worried.