Saturday, October 31, 2015

You only have 6 months to act!

As I wrote yesterday morning, the file-and-suspend strategy many Americans have used to boost their Social Security benefits is on the chopping block. And I warned that if you are considering using this idea, you better act quickly.

Well, later in the day news came out that a provision to eliminate this tactic is within a bill that averts a government shutdown. Congress has agreed to it, and the President is expected to sign it any moment.

But you’ll still have six months after the bill is signed to file-and-suspend your Social Security payments.

So now you have a deadline. Don’t dawdle. Once it’s gone it’s gone forever, which could mean losing thousands of dollars in benefits. 

Friday, October 30, 2015

File-and-suspend on Obama’s Hit List

File-and-suspend has become a popular strategy for married couples who want to get the most from their Social Security benefits. It lets them earn credits for delayed filing and bring in some Social Security income while they wait.

Here is the most common way to use file-and-suspend:

The spouse with the higher benefit files at his or her full retirement age (FRA), then immediately files a notice to suspend payment of those benefits. That permits the spouse with the lower primary insurance amount (PIA) to file for a spousal benefit, which is equal to half the higher earner’s benefit.

That gets some income flowing to the household while the higher earner continues to accrue higher benefits. The higher earner can wait until age 70 to begin benefits; the lower earner then converts to his or her own full benefit.

The couple receives higher individual benefits for the rest of their lives. If the husband dies first, the widow then converts to a survivor benefit, equal to 100 percent of her spouse’s benefit. 

But the White House has proposed eliminating it on grounds that it’s a loophole mainly benefiting upper-income households. So if you’ve been thinking about filing and suspending your Social Security benefits, you better do it while you still can.  

Monday, October 26, 2015

Individual real estate investors score big in blue-collar markets

I’ve been saying this for years: If you want to build a profitable portfolio of investment properties, avoid high-price homes in upscale markets. Instead, go for older single-family homes in working class, blue-collar neighborhoods. And RealtyTrac recently confirmed my philosophy.

The data firm found that the highest yields for single-family homes can be found in secondary and tertiary neighborhoods in secondary and tertiary markets. These somewhat older homes in older neighborhoods are benefiting from rent growth and strong demand for rental housing. And they are far away from the places where institutional investors have bought thousands of rental homes.

According to RealtyTrac, in some of those blue-collar markets the average home price is well under $50,000 and average rents are significantly higher than $1,000 a month, adding up to annual rental yields of over 30 percent. 

You can read more about RealtyTrac’s findings by clicking here

Wednesday, October 21, 2015

$29.7 BILLION a Year!

That’s the estimated annual value of unpaid caregiving provided by 2.6 million Floridians for their older relatives and friends over nearly 2.5 billion hours. 

Monday, October 19, 2015

Americans missing the mark on life insurance benefits

According to a survey from Northwestern Mutual, the majority of Americans think life insurance is only meant to pay final expenses or provide for survivors. But in actuality, life insurance can offer many other benefits while you are alive, such as:
  • Paying for college
  • Taking out a loan
  • Funding charitable contributions
  • Paying mortgages and debts
  • Paying estate taxes
  • Creating an estate
  • Providing a cash flow in retirement
  • Equalizing an inheritance

Click here to download more on the study’s findings. 

Tuesday, October 13, 2015

Latest research uncovers the changing face of long-term care

In A Boomer’s Guide to Long-term Care, I discussed the plight of unpaid caregivers and long term care cost. According to a 2006 Urban Institute report:

  • About three-quarters of frail, older people receiving assistance outside of a nursing home rely on unpaid caregivers.
  • Unpaid caregivers provide an average of 201 hours per month to help with personal activities and household chores.
  • Nine out of ten married, frail Americans receive help from their spouse. One out of three of these caregiver-spouses have health problems themselves.
  • More than half of the elderly who need assistance are unmarried and receive help from their daughters.
  • Over half of adult children helping their frail parents are employed.
With each generation this is becoming more and more difficult – and stressful – for families who are trying to balance personal responsibilities with work demands. These caregivers may feel isolated from their friends and overwhelmed by their responsibilities. The result can be high stress levels, depression, and physical ailments.

Now a just-released report from Genworth revealed additional impacts, financially and emotionally, that providing long term care can have on unpaid caregivers. Plus it provides insights on ways to mitigate those impacts by planning for what may lie ahead. Click here to read The Expanding Circle of Care, Beyond Dollars 2015.   

Monday, October 5, 2015

Reverse mortgage vs. long-term insurance

Has the hominess of a former U.S. Senator or the sincerity of a 1970s sitcom actor got you thinking about a reverse mortgage to help supplement your income? Scores of seniors have taken this route.

A reverse mortgage could also be used to pay for long-term care. But is it a good substitute for insurance? This article in USA Today offers a few of the pros and cons. 

And for more ideas on how to plan for your long-term care needs, grab a copy of A Boomer’s Guide to Long-term Care.