Financial Planning, Retirement Issues


Boomers fueling Self Driving Car Interest

February 7th, 2016 ernie Posted in Life Style No Comments »

Boomers fueling Self Driving Car InterestImagine that you have just turned 80 and are about to lose your driver’s license. Or perhaps you have lost your confidence to drive around the city. Would a self driving car be of interest to you in this situation. Boomers are retiring by the thousands and they are aging as well. It turns out that the market futurists feel that Boomers fueling Self Driving Car Interest is the next big thing. It makes sense. If these cars can actually drive around the city, take you to your destination and find a place to park, what a release of freedom it will be for many that must give up driving a car.

Boomers fueling Self Driving Car Interest – Taxi’s

But they can take taxis. They do not have to take their own cars. They also do not have to worry about buying a car or paying for insurance. Still taking a taxi everywhere can get expensive, especially if the trips are across town or even longer.

A self driving car can provide the freedom for many consumers who are losing their license or just do not feel confident about driving. All you need to do is to get in your car, give voice commands regarding where you want to go and your off. How easy would that be. No more navigation issues, following a map or a GPS. Sit back and relax while the car does all of the work.

It will be a few years yet before we see a lot of these self driving cars on the road, but we think by 2020, when a lot of baby boomers will be facing driving issues, these cars will be on the road. Governments will work out the legalities, insurance companies will work out the liability associated with accidents etc. The technology will not be perfect, but with experience, accident investigations etc, it will improve significantly.

I cannot wait to try one of these self driving cars myself. How about You?

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High Housing Cost Makes it Difficult to Retire

February 14th, 2015 ernie Posted in Life Style No Comments »

High Housing Cost Makes it Difficult to RetireYour home is paid off and yet you are wondering if the high housing cost makes it difficult to retire. When you retire some costs will decrease such as work related costs, however there is a good chance that other leisure related costs will go up since you have more time on your hands. Then of course there are the taxes, utilities and general upkeep on your home that will increase by some amount every year. Depending on your pension and  other income, your expenses could increase faster than your income. For many people this represents a significant problem and may push them out of their homes! In this situation, high housing cost makes it difficult to retire.

High Housing Cost Makes it Difficult to Retire

There are several options however it is important to analyze your costs, how much they will increase year over year as well as your income. Once you have these numbers you can decide on the appropriate alternative to select.

  • You plan to retire and stay in your home
  • Should you down size
  • Sell and Rent

Each of these scenarios should be assessed after assessing the following:

Regular operating costs for things like utilities, heat, electricity and other regular monthly and annual fees that are part of maintaining a home. Some may have HOA fees, while others will hire lawn maintenance. All of these regular fees should be included.

Maintenance costs whether you like it or not occur every year. Small things such as leaking faucet repairs, window repairs, maintenance of lawn mowers etc. While they should not be large amounts they never the less add up over the year.

Housing repairs such as roof replacement, driveway repairs, major appliance repairs or replacement including furnace and air conditioning.  These are big ticket items and need to be budgeted for if you plan to stay in your home. Even if you move, these also could be issues that you need to deal with if you purchase a home that is not brand new.

If you do decide to move, take into account everything associated with the move which could include real estate fees, legal fees, bank fees, land transfer taxes, moving costs, decoration costs, updates and repairs to the home you move to. Even if you move to a brand new home there will be landscaping for example, window coverings, and decoration costs.  Discuss all of these items with your  spouse to make sure that you are agreed on what needs to be completed associated with moving.

Confirm your cash flow in retirement based on the analysis you complete for the above scenarios that reflect your personal situation and then make up your mind regarding which one makes the most sense for your situation.

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The Sandwich Generation

February 7th, 2015 ernie Posted in Life Style 1 Comment »

Sandwich GenerationEver heard of the The Sandwich Generation? We will all go through it eventually unless we are extremely unlucky. This is the situation were you are raising your own family and also have elderly parents who need a great deal of help to manage their finances, their home and in some cases even their health. We are pulled in both directions and it can become quite busy and stressful, however would you want it any other way.  For example you might not have kids and miss out entirely on that side of life. Your parents could already be gone and you will miss them. Regardless of the stage that you are at, take the time to enjoy both your own family and your parents. By including them you will get to enjoy many different aspects of family life that you would otherwise miss.

There are some things that can be done to help make life easier for both parties. It is really up to you regarding how you manage your life and that of your families. Make the most of it while you can.

The Sandwich Generation – Finances

At some point you may have to be approved as a proxy for your parents so that you can pay their bills and manage their day to day expenses. You may have to see the bank were all of the accounts are held and have your parents give you the authority to do this. Many people are nervous about taking this approach since money is involved however at some point there is no choice. A living will is another good thing to consider. A living will spells out how health issues are to be dealt with and how money and bill payment is to be handled. It is all very legal and should be set up using a lawyer.

The Sandwich Generation – Health

As our health begins to fail we can do less and less physically.  Most people want to be independent, however if someone is willing to help, take advantage of the assistance so that you can focus on the things that can be looked after by yourself. if you are a child or care giver, remember that the senior person is most likely has a lot of pride and does not want to admit that they can no longer look after themselves. Be positive about things and make suggestions about what you can do to help, let the person consider it and pitch in whenever you can.

The Sandwich Generation – List of Helpful Activities

  • Day to day managing finances
  • Daily chores
  • Home maintenance
  • Outdoor lawn care and maintenance
  • Paying bills
  • Buying groceries
  • Cooking meals
  • Daily hygiene

 

 

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Retirees Staying in Their Homes

January 21st, 2015 ernie Posted in Life Style No Comments »

Retirees Staying in Their HomesIn a survey of 4,000 Baby Boomer households conducted by the non-profit Demand Institute, 63% of Boomers plan to stay in their current home once they retire. This is a huge number and is driven by a number of financial and emotional issues that we will all face one day.With more retirees staying in their homes, what does this mean for families?

The real question is when is the right time to stay and the right time to find something smaller, perhaps less expensive and easier to maintain? This is a tough question for many people since there is often a lot of emotional attachment to the home. After all it may be the home where you raised your kids, you have lived in it all your life or you may just like the neighborhood and the people who are your close neighbors. it could also just be sentimental reasons that keeps 63% of people who are retiring to stay in their homes.

Retirees Staying in Their Homes – Considerations

The most obvious question is whether you can afford to stay where you are. There is general day to expenses for utilities and care of the lawns etc. Then there are repairs that are needed from time to time and as we get older, we can usually do less and less which means that either it costs more to hire help or the house gets that run down look and the value of the home declines.

Health is another issue which affects your ability to continue with maintenance. Health costs may also dictate that the house needs to be sold to cover the cost of health treatment, unless you have lots of savings to live on.

Moving is not inexpensive. There is the cost of legal and real estate fees. The actual cost of moving and doing upgrades the costs can add up very quickly. In some markets, that condo you are looking at just might be more expensive than the house you are selling.

For many seniors it is just simpler to stay in place. Spend the money that would have gone to cover moving costs on maintaining your home. It becomes a very personal decision based on the situation, finances, emotional ties and many other personal issues. Try to work through them one by one. Remember that no decision or delaying a decision is actually a decision to maintain the status quot!

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Boomers Staying Home

December 30th, 2014 ernie Posted in Life Style No Comments »

baby boomers staying homeIn a recent survey of 4,000 Baby Boomer households conducted by the non-profit Demand Institute, 63% of Boomers plan to stay in their current home once they retire. They do not plan to downsize to a smaller home. They do not plan to move to a condo and they do not plan to move in with one of their children. This is a surprising statistic given the expressed interest by many people that they want to sell their homes. They want to find something they can move into which gives them less work. They are looking for freedom to travel both financially and from work to maintain their homes.

Having gone through this same analysis personally we have reach the same conclusion about staying in our home. We initially thought we would sell our family home. We would find an inexpensive condo, lock the door and travel. No need to worry about upkeep and routine maintenance activities. Turns out that this dream was not practical from a financial perspective unless we were willing to lose a lot of money. Here is some more detail as to why many boomers are finding this to be the case.

Boomers Staying Home – Expensive to move

We found it to be very expensive to move as we are sure that many others have. Let’s assume that your home is worth $300,000, a nice round number. Real estate fees will cost $15,000 @5%, legal fees will cost at least another $2000. Various city taxes and fees can vary a great deal from nothing to $10, or $20,000! Then there is the physical cost of moving, even with friends helping is going to cost $500 to $1000. Of course not all of your furniture will fit in the new home. There are window treatments along with various adjustments and upgrades needed in the new home. The sky is the limit. Add your own number, but we will choose $10,000 to be on the safe side. It will probably be much more than this.

When you add all of this up the cost to move could end up between $30,000 and $50,000 depending on your assumptions. For our money we would rather put that $30,000 into our own house. We enjoy and stay in the same neighborhood that we have been in for over 25 years. We can also use some of that money to pay someone to look after the house while we are away as well. Note , if you travel, your home insurance will require that you have someone looking after your home while away. They should be checking on it at least once per week or more often.

When you work through the numbers it is evident that we are going to stay right were we are along with the 63% of the population.

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Challenges in Retirement

December 14th, 2014 ernie Posted in Life Style No Comments »

Challenges in RetirementThere are lots of challenges in retirement. Many people retiring without enough money, health issues and family issues to deal with. Still many people can have a great retirement if they properly planned and saved enough money. Unfortunately many Retirees are broke due to poor savings while they were working. Sometimes there are uncontrollable events in their lives, and the need to provide support to their families.

Challenges in Retirement – Stress in Retirement

Not having enough money to live comfortably in retirement causes a great deal of stress during what should be the best years of their lives. Without sufficient funds to live on, wondering where food is going to come from or how you will pay for it and going to secondhand stores it can be very difficult for many seniors. North America is not exactly a senior friendly continent as compared to other locations such as  in Europe. We do not seem to value our seniors in the same manner that they do in Europe and as a result many are struggling with a great deal of stress in their lives.

Loneliness in Retirement

Not having sufficient money during retirement with family often many miles away it can get quite lonely in retirement. Unless they live in a neighborhood where people have lived all their lives, they have friends to socialize with many seniors find themselves unable to get out to be with friends and socialize.

Ignoring Health Issues

Lack of money also means that they tend to ignore health issues. If there is insufficient insurance to pay for health coverage many health related issues will be ignored until it becomes an emergency. Older age seniors develop life-threatening issues just because they do not have sufficient funds to pay for health costs.

Worry about Health costs

There is a constant worry about how they’re going to pay for health related costs. Even a visit to the doctor or the dentist may add additional stress and aggravate an already existing health condition. Insufficient savings, or insufficient health coverage can lead to stress related health issues. Ignoring health issues can also cause more serious issues to develop.

More Retirees are Working

As a result of all of the above, we are seeing more and more retirees going back to work. They may choose to work at part-time jobs that pay minimum-wage but at least they are getting out and making some money to put food on the table. This income along with  meager savings that they may have and in a few cases provides healthcare coverage allows them to live a better life.

Still Getting Frisky

Another interesting fact is that many seniors are still getting frisky with the opposite sex even though they may be getting up in years. Recent articles in the news has referred to seniors partying and dancing leaving to extracurricular activities. This is great news and will keep everybody healthy.

Moving in With the Kids

In some cases when ones spouse passes away, the other spouse will move in with the kids. If there is insufficient room in the home, this can lead to lots of stress for everybody. In some cases mom or dad will integrate well with your family until  health related issues crop up.

Traveling is a Dream

And for many seniors traveling is actually a dream that they dream about while they were still working but sadly are unable to fulfill that dream once they retire due to insufficient funds. They have enough to live on, in some cases comfortably but not the extra money that they need to travel and see the world the way they anticipated. This is a sad reality that sinks in a few years after they retire.

Targets for Scammers

Many seniors are also targets for scammers. It’s an unfortunate aspect of our society. With lots of sales pressure placed on seniors, they often will separate them from their money leaving them in an even worse situation than they were before. This is a terrible reality.

With all of these challenges and retirement it is still possible to enjoy retirement and make the most of your life regardless of the situation.

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Carrying a Mortgage into Retirement

December 7th, 2014 ernie Posted in Life Style No Comments »

Carrying a Mortgage into RetirementThirty percent of Americans 65 years and older are carrying a mortgage into retirement and trying to figure out how to handle the payments. No one really wants to carry a mortgage into retirement, however in many cases it can just not be avoided. There may be health issues that take a lot of money, there might have been a divorce or separation, there may be children’s education to pay for or maybe you just spent too much and did not plan properly.

In many cases, consumers have been laid off from a well paying job and find themselves unable to find another job, effectively putting them into retirement. Whatever the reason, carrying a mortgage into retirement can be difficult for some and at the very least it will limit the things you plan to do during your retirement.

Cash flow is all important in retirement. The bottom line is that there is only so much money coming in each month, your expenses will eat into that income. Your mortgage that you carry into retirement will eat into this cash flow along with your expenses for living, visiting the grand kids etc. If you are young enough to plan in advance, make every effort to repay your mortgage in full prior to retirement.

You will have all of the cash you need to live your life. Many people will use a line of credit to help them deal with situations where they do not have the cash to handle various situations. While these are excellent tools, there is the danger of using them and then finding that you cannot pay them off quickly since the cash is just not there.

Carrying a mortgage into retirement

Folks in this situation have  much less flexibility in spending due to the cash flow impact. That $400 or $800, whatever the mortgage payment is, is money that you don’t have to enjoy in your retirement.

Other pressures such as putting students through university, unemployment, retiring early, health expenses etc. can affect your ability to repay the mortgage. Even if you have a line of credit against your home which you consider a loan, make sure that it is fully paid before you retire. We see lots of people spending a lot of money in the years before they retire to upgrade the house, buy a car, major repairs to their home etc. If you have the cash to pay these major expenses great, if not make your cash last as long as possible to avoid serious cash flow issues.

Pay off high interest loans first, then focus on low interest mortgages. By taking this approach you can at least minimize the amount of interest you are paying each month.

For more life style topics, click here.

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Greening Your Office

March 14th, 2014 ernie Posted in Life Style No Comments »

Greening Your OfficeEveryone is concerned about the planet getting warmer, except of course some people who are worried about losing money. But the bottom line is that if we do not do our part, our weather is going to change and not for the better. We all need to do our part in reducing green house gases. There are many green ideas for greening your office that employees may consider.

  • Go electric
  • Paper
  • Lights
  • furniture
  • Commute
  • Dress Right
  • recycle bins
  • switch off

Greening Your Office – Go electric

Technology is here for a reason — digitalize and dematerialized as much as possible. e-mails, invites, calendars and files can all be saved onto your computer rather than on paper. Back up all information on an external hard drive — as much as we love technology, computers do tend to crash and burn when loaded with too much information.

Paper

Print only if you must as most of the time you can make changes directly on the screen without printing. When you do print, choose a double-sided setting, which will print on both sides instead of just one. When restocking, use recycled paper. Encourage people to use email etc and avoid delivering paper reports.

Lights

Switch off all lights when you leave the office, especially desk lights that are smaller yet easily forgettable, but still powerful. Switch to LED (light emitting diode) bulbs which are more efficient than traditional ones and will last much longer than all other types of light bulbs.

Furniture

Choose office furniture — desks, chairs, filing cabinets, made from sustainable wood, recycled metal and non-toxic waste. If you need to change furniture, donate it so that it can be reused again and again.

Commute

Public transport such as bus, subway, train, car is overcrowded and stressful. It also contributes to your carbon footprint and to the toxic fumes emitted as complete your journey. If the work is not long-distance and weather supports, either cycle or walk to work. It’s healthier and a cheaper option with minimal impact on the environment.

Dress Right

Summers are warm and winter’s cold –. Dressed appropriately in order to not turn the heater or air conditioning on full blast, as you step foot in the office. Bring an extra jumper or pair of tights to cozy up in the cold and if it’s too hot, buy water spray or small fan.

Recycle bins

Have one main recycling bin where everyone can throw in paper, cardboard and plastic waste. Place it somewhere obvious with easy access. Although you may not save money at least you will be helping to protect the environment.

Switch off

Leaving your computer on overnight will eventually burn out its battery,  and it is simply not necessary. Set up your system so that hard drives switch off after so many minutes and your screen protector activates and shuts down the screen as well when not in use. This will extend the life of your computer significantly.

For more life style ideas, click here.

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Starting a New Business

February 21st, 2014 ernie Posted in Life Style No Comments »

Starting a New BusinessMany consumers across North America are thinking about starting a new business. These consumers have either been laid off prematurely, retired prematurely or have retired but need something to do in their daily lives and starting a new business is one solution to meet this need to be busy and involved in their lives.

Aside from the fact that many consumers to find themselves in a position where they are able to start a new business, technology is providing many new solutions and opportunities for business people. Whether it is a technology solution that is being offered or technology is being used to enable a small business many consumers are taking advantage of this huge opportunity and creating their own small businesses. Millions of Canadians and Americans this year will develop and start their own small business.

Starting a New Business – Seniors

Seniors and people over 50 are part of the fastest growing group of people who are starting new businesses. The majority prefer to be self-employed and prefer to be their own bosses. Even though they may have left an employee position, they have much more freedom and opportunity when they run their own business. The self-employed are more likely to be educated with over a third of new business owners having a university degree. Women tend to be more successful than men at starting and maintaining a new business.

Educational services and healthcare services are the fastest-growing new business opportunities.

The following segments appear to be some of the major areas the people are starting new businesses in and provide many opportunities.

Starting a small business is not for the fate of hurt. Government regulations, incorporation, banking and technology services that are needed to operate the business, a strategic plan and a business plan, product development service development and marketing plans are all required to develop a long-term successful business opportunity. A lot of hard work and long hours is often required to get the business started and keep it profitable in the short-term.

Increased connectivity – Technology is increasingly leading to a higher level of cooperation between small business, self-employed and larger firms. Larger firms are calling upon the specific expertise of smaller enterprises to complete projects. This kind of cluster of competencies and strategic alliances will be temporary and at the end of a particular project they will dissolve and reform into other groups that are focusing on a particular solution, project or customer.

Growth in outsourcing – “Canadian small businesses are in a co-evolutionary relationship with corporate business in the economic landscape. Small businesses are needed by large corporations to create the necessary reach and depth into local markets as distributors and agents for products and services. Small-business owners also provide temporary manpower in terms of contract services to larger business and government.

Increased demand for personalized products – An aging population means growing sophistication and a rapid change in consumer tastes. This is positive for self-employment as small scale operations are flexible and can support increased demand for personalized services given their ability to focus on niche markets. Small-business owners can focus on providing services to a growing senior population who are unable or unwilling to do much of their own work around their homes and yards.

For more thoughts about changing lifestyles, click here.

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Time management for a satisfied retirement

November 14th, 2013 ernie Posted in Life Style No Comments »

satisfied retirementMany people approach retirement in a variety of ways. For example some people will not schedule anything at all during the retirement spare time. The other extreme of course is the type A personality who has to have every 15 minute interval scheduled for to do list items, things to do around the house and even naps in the afternoon, along with meetings with colleagues and friends. this person may as well be still at work since they really are not enjoying their retirement.

Time management for a satisfied retirement – Strike a Balance

Studies have shown that the best way is to strike a mid range of planning for your retirement. The most satisfied people during their retirement appear to be those people who have lots to do, things are scheduled for them, but they are not unsatisfied or upset when something has to be moved from one day to the next. There is no rigid schedule in their plan for the day.

When people are first retired, there is a tendency to schedule their days in the same manner that they would if they were at work. This leads to frustration and rigidity in their schedule and generally being unsatisfied when they can’t complete all of things that they have scheduled for themselves to do during the day. If they cannot fill their day they are frustrated and bored. It takes a few months to make an adjustment to being retired.

Those people who have a list of things and are prepared to work on their items as time permits and frequently insert new spontaneous things into their schedule appear to be the most satisfied in their retirement.

Adjusting to Retirement

It will take many consumers several months or perhaps even a year or two before people are satisfied with the retirement and have figured out what is best for them. Whether it is developing new hobbies, going to various locations to volunteer, or taking on projects that they have put off all of their lives, there’s always something for retired persons to do.

It is important to figure this out and then proceed in a manner which provides the most satisfying results for you. You may in fact want to try various approaches and then shift as you get results and decide that you like what you’re doing or are unsatisfied with what you’re currently doing. Trial and experiment will lead to a satisfied retirement.

The biggest challenge in retirement for many is figuring out what to do with all of the additional free time that they now have since they are not commuting and going to work every day. That can be as much as 50 hours a week to fill in with new things and challenges.

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