Annuities Archives - Page 11 of 16 - Jerry Golden on Retirement

GOP and Democratic Social Security fixes both fall short

August 24, 2016 By Jerry Golden in Social Security, Two-stage retirement 1 Comment Tags: Annuities, Baby Boomers, retirement income, Social Security

With election season in full swing, the Republican and Democratic parties are running on platforms that explain how they would tackle difficult problems facing the country. I was particularly interested in their stands on Social Security. As the government’s most expensive program, which affects millions of workers and which faces the possible need to reduce payouts after 2037, leaders of the two parties will have to do something eventually.

What they choose to do would affect each of us in different ways, ranging from no change in our circumstances to potentially large adjustments in lifestyle. I consider myself neutral in the political debate, beyond desiring a solution that doesn’t lead to calamity. With that in mind, I present both parties’ stances on Social Security in this article, and also examine some possible approaches that I believe would lead to financial health for retirees in a second article to be released next week.

When it comes to Social Security, here are my general principals: More

The joys of parenthood: Paying for college while planning retirement

August 17, 2016 By Jerry Golden in Annuity Tags: Annuities, Baby Boomers, retirement

One of my first assignments as a junior actuary was to analyze a new program that helped students to afford college. It was a public-private loan program that varied students’ repayment responsibilities based on how much money they made after graduation. For each $3,000 borrowed, a student-borrower committed to paying the loan back with 1% of their earnings. So if four years of college cost $24,000, the student committed 8% of their earnings.

The loan had a market rate of interest and you kept paying until the balance was paid off.

If you had a well-paying job, you paid down the loan quickly. If you were teaching poetry to prison inmates, you might only pay off the interest and never repay too much of the principal. My job was to look at the “actuarial aspects” of the loan program and price the insurance cost of paying off the loan in the case of death, disability or unemployment.

That project has influenced my position on paying for college ever since. More

A strategy for income as Boomers age and taxes loom

August 9, 2016 By Jerry Golden in Annuity, Two-stage retirement 10 Comments Tags: Annuities, Baby Boomers, Guaranteed Income, retirement, two-stage retirement

The first Baby Boomers turned 70½ on July 1, which means most of them have to figure out how to pay more taxes to the U.S. government. It takes a little edge off the half-birthday celebration, doesn’t it?

The oldest Boomers can still take advantage of strategies to minimize taxes, but the best approach might involve (as Boomers used to say) an attitude adjustment.

These taxpayers have been diligently putting savings in 401(k), IRA and other retirement accounts to pay for retirement. When they reach 70½ they must begin to take money out of those accounts to meet the statutory minimum of Required Minimum Distributions, or “RMDs” for short. More

Take charge of your own retirement

August 2, 2016 By Jerry Golden in Annuity, Social Security, Two-stage retirement Tags: Annuities, retirement income, Social Security

Anyone who has taken the time to fill out the input required for more than one retirement calculator will know the output results vary dramatically. Recent studies by financial and academic institutions, in fact, show that the numbers you get could vary by 60 percent or more!

No matter how much careful skepticism you apply, there is no way you can use those calculators to help you reliably plan for retirement. As I wrote in a blog post earlier this year, such calculators fail to account for several factors while determining the “magic number” you seek. In fact, calculators don’t even give you a reliable range of numbers to choose from.

The problem with calculators

Not only do calculators each use different algorithms and assumptions, they also often leave important factors, like taxes or late-in-retirement expenses, out of the equation. Also, if one calculator assumes your return on investment will be 5%, and another predicts 7%, the results will be impossible to compare. More

A smart mix: Family vacations and a check up

July 13, 2016 By Jerry Golden in Annuity, Two-stage retirement Tags: Annuities, retirement income, Social Security

Summer vacation is the perfect time to visit with family you haven’t seen in awhile as you enjoy the leisure activities – and check up on how your parents are really doing.

Most of the time, everything will be fine. Dad might walk a little more slowly and perhaps mom tires more easily, but it’s great to get together year after year.

At some point, though, maybe you notice something more troubling – one of your parents is having trouble remembering, or a sudden weight loss has been ignored. That’s when the squeeze begins for the sandwich generation, with the difficult and complex steps you need to contemplate, including figuring out their financial and living situations.

You may find they haven’t been paying all their bills or medical costs might loom that threaten to deplete their savings. Thank goodness you are there for your parents. It will be a trying time for you, but in many cases it would be impossible for them without you. More