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Mythbusters: Saving For Retirement Is Hard

Mar 13

Posted by admin in Wealth Building

Not necessarily. Actually, it depends on your definition of ?hard.? I began a 401K and pension fund when I was hired on at my company 24 years ago. Today, I have a nice retirement. But that was just my individual case and I?m sure your circumstance is far different. So let?s focus on you, instead. Whether you?re twenty or forty, you have to make a tough decision. You have to do without something now to benefit later. In other words, you have to save money now, and that means sacrifice.

The younger you are, the less you have to give up. That?s because your savings multiplies faster over a longer term. Hence, you can put aside a small amount and watch it grow using the magic of compound interest. Assuming that you can get a 5% return on an average investment, we can run a simple chart. That return is based on most common tables that are not tied to equities or bond funds. Although most experts would agree either should generate that type of return. Even guaranteed CD?s, or certificates of deposits, backed by FDIC for safety sake, can offer similar rates. But whatever device you choose, let?s use that number.

So let?s look at one example. Suppose you are 25 years old and make $10 an hour or $400 a week or $1600 a month. After taxes that?s about $1200 monthly. I want just $150 of that, for your monthly investment. Figure that if you were to give up a Starbucks coffee costing $5 every day, there?s your $150 a month. Do that for the next 40 years and you?ve given me $72,000. But, by investing the monthly amount in a 5% returning account, the compound interest turns this into $228,900 by age 65. Not bad for someone doing without a Vente Caf? Mocha Latte every day. Now, as you make more with raises, job changes, etc., and you could quadruple that investment, you?ve got over $1,000,000 for retirement.

But I?ve got an even better plan. Could you squirrel away $5,000 for that first year? I know that?s a lot to ask, but hear me out. If you could manage to put aside $10,000 over two years and invest it, never putting in another dime, you won?t be able to guess what you would amass after 40 years. $50,000! But, if you could somehow get a 10% return instead, investing the same $10,000 for 40 years we would make you about $500,000! That is an example of how the interest rate affects the return. And there are ways to generate a 10% return using equities or mortgages. I suggest you talk to an investment adviser for that information.

The great advantage of this plan is you: (a) didn?t have to give up much, (b) don?t have to be an investment wizard, (c) let time and compound interest work for you, and (d) can look forward to a healthy retirement. Of course, the more you?re willing to give up now, the greater the end result. But working harder isn?t the answer: it?s saving smarter and earlier. Therefore, if you?re in your twenties and figure retirement is decades away, you?re right and that can work in your favor. So start planning now and the rest will take care of itself. Savings for retirement is hard? Myth busted!

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Who Will Look After Me Once I Am Old

Feb 24

Posted by admin in Personal Finance

Everybody is aging in today’s society, many countries are approaching a point where people over the age of sixty will outnumber the younger generations. This is because better health care is helping people live longer, more productive lives. Getting the right kind of aging care is important if you want to keep enjoying a good quality of life.

Keep in mind if you’re selecting a health care facility or care method for a loved one, you need to be realistic. It is normally hard to accurately view the health needs of a parent or relative since you want to think they are capable and in good health. But ignoring the needs of certain medical conditions, whether the wandering tendencies of an Alzheimer’s patient or the tremors of a person with Parkinson’s can actually do them harm.

Do you like the idea of staying in your own home? Consider a care provider who will come in and help look after your needs. Think about the specific needs you will want met, and the home itself. If mobility is a problem, someone may need to move to a home with no stairs. If you cannot lift, consider having help with your housework and yard work. You should think carefully about the different things you need to do around the house and make sure that these are taken care of in order to make living at home as successful as possible.

You may look at a retirement residence as a good transition from your home. You want to make sure that the facility you choose has activities you will enjoy and enough privacy and independence that you will feel at home there. Look at this place as somewhere you will want to live for a long time. Health care methods and advances in medical care can keep you around for many years to come.

Nursing care facilities may be the next step that you will consider. Normally, a person is admitted into a nursing home when they have significant physical or mental impairments that make any level of self-care impossible. They usually have less segregated living arrangements and activities which are less varied or active. People who are suffering from altered mental states due to disease or the after effects of a stroke may require a room in a nursing facility.

Once aging has reached a very advanced stage, you may need to use palliative care to provide you with personal care until you pass on. This can be a hard decision to make especially since it is normally being made on behalf of a loved one, instead of by the loved one themselves.

Senior care is quickly turning out to be a growth industry. Everyone is requiring more care for longer periods of time and the different levels of physical needs has caused people to need specialized aging care. Knowing what stage you or a family member has reached is the key to getting the care you, or they, need.

Before you decide to go and get a policy get more long-term care ins info and request a long term care insurance quote visit us today. We represent 20 of the top LTCi providers. This provides you with tremendous options.

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Long Term Care And Things Everyone Should Know

Feb 5

Posted by admin in Personal Finance

No one intends to get hurt, and everyone expects to get old. But with the growing number of elderly people, and with the relevance of long term care changing constantly, it is very important to know what might be in your future. How prepared are you? And what do you need to know before the worst case scenario happens?

It’s a terrible thing to one day be a self sufficient adult and the next find yourself relying on the kindnesses and help of others to do very simple things. Long term care is about just that, helping people who are no longer able to help themselves in some of the smallest ways possible. It includes a variety of services for those who are disabled and those who are elderly, and these services can be of a medical nature or not. Dressing, bathing and using the bathroom are things many people take for granted.

Many people try not to think about the worst case scenario or what will happen to them when they get old. However, these people also wrongly think that the government will take care of them and cover all of their costs. Even in the most progressive European countries, this simply isn’t the case, and care for the elderly or permanently disabled falls on volunteers or if someone is fortunate, relatives willing to take the time to help.

In the United States, Medicaid eligibility is dependent on a person’s resources and income. Medicare does not cover custodial or unskilled care provided by family or friends. Many Nordic countries now have programs in place to provide some sort of financial compensation to those who tend to the elderly or disabled, even if they are relatives. Some of these programs even include pensions. However, North American countries don’t have this luxury just yet.

Twelve million Americans require long term care. Five million of these people are of an adult age that is typically a part of the workforce. It’s not something people typically plan for, though they have no challenge insuring their homes, their cars, their lives. It isn’t hard to prepare for the future and ensure that should long term care become important, it’s available.

One of the first things to know is that the sooner a person begins to provide for future long term care insurance, the better. In their fifties, most people are still fit enough to pass a medical if one is necessary. Premium costs are also lower and this is pretty important, as a typical stay in a long term facility is $150 a day. Another thing to know is that once you are locked in on a plan, should your health change, your premiums won’t. A third thing to bear in mind when planning future long term care is that there is typically an elimination period. For the first sixty or ninety days of care, the policy will not be there. It doesn’t kick in until after this period. Be prepared financially to bear that burden until the policy comes into play.

The population of the elderly is growing substantially. But with this growth comes a larger amount of information available to help people prepare for the worst case scenario. No one wants to get sick or become so aged that they can’t take care of simple daily tasks themselves. However, it is a possibility, and one that can be planned for appropriately if you know what to expect if it happens to you.

Before you go out and buy a policy go to Long Term Care Insurance, ask questions and request a long term care insurance quote. We represent 20 of the top LTCi providers. This gives you tremendous options.

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Shortage Of Nurses Is A Big Issue For Long Term Care

Feb 4

Posted by admin in Personal Finance

Baby boomers have reached the age when they will soon be retiring and this is a major reason why they have begun to worry about getting proper long term care. Unfortunately for them healthcare in the case of baby boomers does not seem to be easy to obtain which means that these people are going to face a difficult time in the foreseeable future.

Baby boomers fall into a category of those who were born in a period ranging from 1946 to 1964 at which time there was a boom in the American population that was not seen before this time and which has also not been since that time. In these present times, about one third of all Americans happen to be baby boomers and these are the category of people that are most in need of proper long term care.

Since they form a pretty large chunk of the American population there no doubts the fact that taking care of them is a major worry that the healthcare people in the US have to address because these people are going to reach retirement age pretty soon.

It is however interesting to note that many among them are actually working as nurses and in addition there is the worrying news that in the times to come there is going to be a real dearth of nurses to take care of the baby boomers; and, this dearth is not going to disappear in the near term.

When the baby boomers actually do retire it means that a new set of circumstances are going to arise and with a shortfall in the number of nurses available to take care of the soon to retire Americans it would mean that the healthcare industry is going to be squeezed for resources.

This of course will mean that providing suitable care to these people will become a real big headache which is making the custodians of healthcare feel very uncomfortable. Even in spite of doing their best to solve this problem the future does not look too rosy.

In a bid to woo greater number of people to become nurses the healthcare industry has offered higher salaries but this has not had the desired effect. The trouble obviously is that the workload is too heavy and this is deterring people from joining up as nurses.

As for providing the right kind of long term care goes it now rests in the hands of those who can think up more innovative medical solutions and who can come up with newer technologies that can substitute for actual physical care of those who are going to retire in the very near term.

Before you go out and buy a policy go to Long Term Care Insurance, ask questions and request a long term care insurance quote. We represent 20 of the top LTCi providers. This gives you tremendous options.

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Preparing For Long Term Care Must Start Now

Feb 2

Posted by admin in Loans, Personal Finance

Long term care is used by both the elderly and those who are disabled in some way that prevents them from taking care of themselves. It’s not an eventuality people expect and ever so many don’t include it in their existing insurance policies. But knowing that you could relieve the burden on friends and family, wouldn’t you take that opportunity if you could?

Becoming dependent on others can happen suddenly or gradually. Many healthy people take for granted the simple ability to dress one’s self, to bathe alone, to go to the bathroom on their own. However, these are the sorts of things that one relies on long term care for, along with medical procedures and other forms of care.

Even in the best countries, the government is not prepared to handle the growing population of people who require long-term care. Even in areas of the world considered more progressive when it comes to health care, like Europe, the burden of caring for the elderly or disabled is shouldered by younger family members or dear friends.

Different medical programs in the United States cover long-term care in different ways. Medicaid requires eligibility, meaning that a person’s finances and other resources are taken into consideration before their long term care will be covered. Medicare itself does not cover what is called custodial care, nor does it cover care provided by non-medical skilled personnel. However, at least in this respect several Nordic countries are ahead of the U. S. By providing long-term care givers with some sort of financial recompense as well as pension plans where appropriate. Family and friends in these countries can expect compensation for their noble efforts in caring for others.

Of the twelve million Americans who are in the long term care system, five million are work-aged adults no longer able to care for themselves. Not everyone experiencing long-term care is elderly, though that is obviously the vast majority. Most people are caught unprepared by a worst case scenario, and long term care is the furthest thing from their minds. But while insuring your house, your car, your life, why not consider insurance to cover future long term care, should it become relevant?

Three things should be kept in mind when considering long term care insurance. One is that the sooner you start planning for it, the better. Older adults are healthy enough to pass any required medical exams, and yearly premiums will be lower than if they start planning later. A second thing to consider is that the annual premiums will not rise should a later health condition arise. They will be locked in. The third thing to keep in mind when considering this type of insurance is that there is an elimination period just before your policy starts to cover your long term care. For sixty to ninety days, depending on the policy, you will not be covered and someone will need to pay for the stay, which can be up to or more than $150 a day.

The number of elderly people is growing. This is natural, given how many different ways there are of prolonging someone’s life. However, the population of people in long term care is also growing. Consider planning for the future, for both the best possibilities and the worst. Putting the right amount of money into the right type of insurance will not bring about the worst case scenario any sooner, and it’s so much better to be safe than sorry.

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Senior Scam Alert #1, Tax Shelter Scams!

Jul 27

Posted by admin in Taxes

Welcome to the Senior Scam Alert, a column designed for seniors, in order to inform them of scams and cons that are regularly committed against senior citizens. Seniors are victims of cons more often than any other age group. Seniors tend to be more trusting, and less apt to question someone who portrays himself as an ?expert?.

Disabled Access Telephone Scam

According to the IRS, a new tax scam has been uncovered. Con artists sell expensive coin-operated telephones to individuals. Then, the salespeople offer to ?lease back? the phones and service them for a fee. The unsuspecting ?investors? are then charged outrageous amounts. According to the Federal Trade Commission, the phones are often never delivered, and the fees continue to be charged anyway.

The telephone salesman also informs the ?investor? that they qualify for IRS Disabled Access Credits; a substantial tax break offered to businesses who invest in equipment and upgrades designed to make their businesses more accessible to disabled individuals. The phones do not qualify for the credit, and the victim is then also in trouble because of tax fraud. The responsibility for tax mistakes always lies with the taxpayer, regardless of where the information came from.

Seniors are particularly vulnerable, because most of them are unfamiliar with complex tax law. Seniors are eager for passive income, since most are retired and do not work. The scam artists promise to provide enormous tax breaks and a steady income. Multiple tax cases have been brought before the IRS regarding this scam. In at least three cases, the company ?Alpha Telecom? incorrectly advised investors that the pay phones qualified for a Disabled Access tax deduction. In 2002, Alpha Telecom was cited by the Federal Trade Commission for violating Federal law. Unsuspecting investors lost thousands of dollars, and Alpha Telecom filed for bankruptcy after being investigated in at least twelve states.

Website Mall Scams

In a similar scam, a salesman offers to set up an internet ?virtual mall.? The internet mall supposedly qualifies the buyer for the Disabled Access Credit, and the scam promises huge profits from internet sales, which, of course, never materialize. The website company sets up a ?dummy? website and then charges the buyer an inflated commission. When the unsuspecting investor attempts to claim the tax credit, the IRS disallows the deduction. The investor is then liable for additional taxes and penalties.

A Las Vegas telemarketing company, National Audit Defense Network (NADN), is one of the companies involved in this ?Virtual Mall? scheme. In 2004, NADN filed for bankruptcy after the justice department discovered that it had sold numerous abusive tax shelters, costing the US Treasury over $320 million dollars. The justice department obtained NADN?s customer list, allegedly comprised of 640,000 taxpayers, all of which may have unknowingly participated in an unlawful tax shelter.

If you feel that you may have been a victim of an abusive tax shelter, contact a tax professional immediately. Enrolled Agents, CPAs, and attorneys are all qualified to represent taxpayers in an audit and in tax court. They can file an amended return for you, and help represent you, if necessary. Enrolled Agents may be the least expensive of the three, because they specialize only in tax.

Remember, ?if it sounds too good to be true, it probably is!?

Christine P Silva, BA, CRTP, lives in California with her husband, two children, and three spoiled cats. She earned her undergraduate degree from San Jose State University, and her advanced accounting certificate and tax license from Cosumnes River College. She is the founder of the Sacramento Volunteer Tax Preparation Clinic, a free service offering tax assistance to low income and Spanish-speaking taxpayers.

Writen By : Christine Silva

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Most Middle Class Americans Are Slaves!

Apr 15

Posted by admin in Personal Finance

I know it sounds harsh, unrealistic. How could that be? We have cars, nice houses, computers, TIVO, etc.

Yes, but isn\’t it curious that 95% of us reaching retirement age are unable to retire, according to the Bureau of Labor Statistics? How is that we can end up with little to no money after \”slaving\” for 40 years?

Step back and take a look at your life through the lenses of someone just arriving from outer space. See how different your situation looks:

You work for The Man.

You are in debt to The Man

The Man owns most of your possessions

The Man controls your life

In the old days, as now; The Man fed, clothed and housed his slaves in return for their labor. Although you are no longer controlled by iron chains, you are now controlled by a pay check.

The Man pays you just enough to meet your basic necessities with a JOB, (Just Over Broke!) but you probably do not have enough pay to get ahead financially. It barely lasts from one pay day to the next.

Has your family been able to accumulate even $5,000 cash in the bank?

That means if you are of no more use to The Man or you displease him, you will be out of a job and financially ruined in a few short months, if you can\’t find another job. Starting to see what I mean?

Your wonderful lifestyle of eating out regularly, sending your children to good schools, going on vacation, wearing fine clothes, driving nice cars, etc. is dependent upon The Man. You really don\’t own most of those houses, cars, plasma TV\’s, etc that you think you do.

Don\’t believe it? Try not paying your real estate taxes, your credit card bills or other loans and you will see what I mean. If you really owned them, The Man could not take them away from you. He actually owns them.

You are in debt to The Man for nearly all of your possessions and the Bible agrees with my assessment of the situation. It says that the \”debtor is the slave of the creditor!\” By taxing you and keeping you in debt, He not only controls you, he basically sucks the very labor and life out of you, which is His goal.

The Man, in the form of taxes and debts, takes the lion\’s share of your income before you even get it. Sort of like a shell game; now you see it, now you don\’t. And you, like most slaves, accept your treatment as normal, Gross Pay and Net Pay, The Man calls it.

Did you realize that you, like the average American, typically have to work from 9AM to nearly 2 in the afternoon, just to make enough money to pay your taxes and your debts for that day?

Is your actual status of a slave becoming clearer now? Virtually everything you have or do is controlled by The Man because he controls your income.

EZ monthly payments bleed you and your family to death like so many paper cuts. He sucks up that blood, drop by drop, becoming fatter and fatter off you.

When you cannot work anymore, you are left to condemned to poverty, as are most non-working seniors. Did you know that it is estimated that 25% of the pet food in this country is consumed by seniors? Fancy Feast, anyone?

Have you noticed how many older people you are seeing working in fast food outlets, Wal-Marts, the super markets? Do you think they are there because they \”like People?\”

No, they are just like the old, tired and sick slaves you read about. They can no longer work in the fields and have no assets to fall back on to provide them with income, so they are fed scraps.

The ball is in your court, now that you know the game.

If you think you will enjoy retirement under the Golden Arches, you can decide to do nothing and keep heading for the scrap heap.

Or you can do something to change course and change your future by getting control of your life by legally slashing your taxes, eliminating your consumer debts and investing now to accumulate income producing assets, then and only then will you break your chains.

I know I have painted a disturbing picture of life for Americans here in the richest country in the world, but it is a realistic one; ask the next retired senior you see working at the mall, you will see what I mean.

Copyright 2006 Bill Young. Bill is a Financial Personal Trainer. He helps individuals and groups learn the Laws of Wealth and how to Quit the Rat Race in a few short years. He did it in 5 years. http://HowtoSolveYourMoneyProblems.Com

Writen By : Bill Young

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