Issue 41.10
Your biggest worry about retirement is probably that you’ll run out of money before you run out of breath. I have been surveying boomers and seniors for years and over fifty percent have voiced this fear. The good news is that outliving your money is preventable if you’ll do a few simple things. Let’s see how.
LTC Insurance: Major medical problems, which are common as we age, oftentimes translate into constant care either at home or having to go to a nursing home. The solution is to purchase insurance that covers the expenses of long-term convalescence care (LTC). The main objection is that insurance is expensive and unless care is actually needed, the money paid is lost. This concern is addressed by using a linked-benefit life insurance policy that guarantees you a no-questions-asked return of the money you paid should you ever change your mind about having insurance.
401(k): If you have a 401(k) or other employer-sponsored retirement plan, you generally cannot transfer the money to safer alternatives while still working. Did you know that employers can easily modify their plans to allow withdrawals while still working? If your employer would add an “in-service, non-hardship withdrawal” provision to their plan, you could transfer money regardless of age, without triggering taxes, while still working and without quitting the plan.
Social Security: About two-thirds of Americans start their Social Security benefits before normal retirement age, even if they can manage retirement by delaying Social Security. For many, this is the wrong decision, because their lifetime Social Security benefits will be cut in half. Social Security grows by 8% annually for each year postponed, and this adds substantially to the dependent spouse’s survivor benefits. In a recent study, we documented that the average retired couple will get about $200,000 more Social Security in retirement by starting benefits at the right time.
Dr. Smith earned his Ph.D. in Economics from Iowa State University of Science and Technology
To receive a free copy of Dr. Smith’s book “The Guide to Social Security – Higher Lifetime Benefits & Lower Lifetime Taxes” call 800-450-0337 or attend the Social Security Workshop advertised on the next page.