Only One Third of Americans Close to Retirement Age Have Taken Steps to Save for Major Expense
WASHINGTON, Nov. 25, 2013 /PRNewswire-USNewswire/ — Today, AARP launched a free online Health Care Costs Calculator, a major addition to their Ready for Retirement suite of planning tools. In a survey accompanying the release of the calculator, AARP found that just one third (36 percent) of older Americans have taken any steps to save for out-of-pocket health care expenses, though multiple studies show that such costs often reach significantly more than $200,000 for a retired couple. The new tool is available to all at www.aarp.org/healthcostscalc.
The free Health Care Costs Calculator can play an important and often overlooked role as families and individuals plan for retirement, said AARP Vice President for Financial Security Jean Setzfand. Health care costs can have a significant impact on retirement savings. With this calculator, AARP aims to help more Americans confidently plan for and achieve retirement goals.
The Health Care Costs Calculator estimates health costs in retirement by utilizing a database that includes $136 billion in costs from actual health care claims. Individuals can select from 82 medical conditions to estimate how much they may need to spend on out-of-pocket health care costs. The calculator also assumes that individuals will be eligible for and select Medicare Parts A, B and D.
After estimating costs with the calculator, users can create a customizable action plan to help save for health care in retirement and make impactful changes in their lives that include planning, saving, and making healthy changes. For example, if a person has get to a healthier weight as a goal, the tool will offer possible next steps for pursuing that goal.
The Health Care Costs Calculator requires no registration and collects no personal data on any user. To learn more about the tool visit http://www.aarp.org/healthcostscalc.
AARP is a nonprofit, nonpartisan organization, with a membership of more than 37 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as healthcare, employment and income security, retirement planning, affordable utilities and protection from financial abuse. We advocate for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name as well as help our members obtain discounts on a wide range of products, travel, and services. A trusted source for lifestyle tips, news and educational information, AARP produces AARP The Magazine, the worlds largest circulation magazine; AARP Bulletin; www.aarp.org; AARP TV amp; Radio; AARP Books; and AARP en Espaol, a Spanish-language website addressing the interests and needs of Hispanics. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. The AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the US Virgin Islands. Learn more at www.aarp.org.
Image with caption: AARPs free online Health Care Costs Calculator sample results. Image available at: http://photos.prnewswire.com/prnh/20131125/DC22810-a
Image with caption: AARP aims to help more Americans confidently plan for and achieve retirement goals with the health care costs calculator. Image available at: http://photos.prnewswire.com/prnh/20131125/DC22810-b
Image with caption: Check out AARPs free Health Care Cost Calculator at: www.aarp.org/healthcostscalc. Image available at: http://photos.prnewswire.com/prnh/20131125/DC22810-c
Wing Lung Bank, a subsidiary of China Merchants Bank, says it wants to double or triple its personal unsecured loan portfolio to achieve better interest income returns.
It has lifted its debt-servicing ratio, the monthly repayment obligations of borrowers as a percentage of monthly income, to 70 per cent from 50 per cent previously, while industry rivals are using 50 per cent to 60 per cent as a benchmark. The higher the ratio, the more money a bank lends out, including all forms of debt, ranging from mortgages to credit card loans.
Banks mortgage lending has been subdued following the governments introduction of several rounds of cooling measures targeting the property market. In order to maintain the size of their outstanding loan portfolios, banks are having to deploy the capital to other businesses.
It is quite hard for increased unsecured lending volume to fill in the gap from the loss of mortgage lending, Wing Lung Banks head of retail banking, assistant general manager Derek Chung, said at a conference yesterday.
The average size of a personal loan amounts to hundreds of thousands of dollars against millions in a mortgage loan. However, it is positive to the bank in terms of return, he said.
Personal loans often have a higher interest rate than mortgage loans because they do not require collateral.
Wing Lungs mortgage lending rate is 2.15 per cent per annum, while its personal lending rate is at least 2.66 per cent, depending on the size of the loan and the repayment period.
The maximum loan amount offered by Wing Lung, the fourth-largest mainland bank subsidiary in the city in terms of asset size, has been increased to 10 times the borrowers monthly salary or HK$1 million, up from three times the monthly salary or HK$100,000.
Chung said the relaxation in underwriting criteria could divert some lending business from money lenders and deposit-taking, non-bank financial institutions in the city to Wing Lung.
He said the bank wanted to see personal lending grow to 10 per cent of its total loan portfolio, without disclosing the present contribution or the time frame being looked at.
Wing Lung aimed to keep its net credit-loss ratio below the market average of about 3 per cent, Chung said.
Seattle, WA (PRWEB) October 19, 2013
Many people are looking for cars, but for too many of these people, finding a good loan seems almost impossible. And for those with bad credit history, securing a loan is especially hard. Complete Auto Loans, however, is dedicated to offering everyone an option for a high quality loan. With a statistical success rate of over 98%, CAL is the place to turn to when no one else has a loan to offer. Their website offers an easy form – simply fill out the fields and be on the road with a good loan in lightning speed! To learn more, read their recent article here: http://www.completeautoloans.com/can-i-get-guaranteed-approval-with-bad-credit-car-loan/.
This article explains the Complete Auto Loans policy of securing a loan for every customer. Regardless of credit score or other hurdle, CAL is committed to providing the best value in auto loans for every consumer. Wherever you are financially though, the article reads, Complete Auto Loans gives you bad credit auto loans Guaranteed Approval. Check out what other people are saying if you don’t believe me. You don’t want to let this opportunity pass you by. To apply now, simply fill out their form at https://www.completeautoloans.com/apply-now2/.
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Freedom Credit Union Now Offering Personal Loans to Members This Holiday Season
Freedom Credit Union is pleased to announce they are now offering their valued members personal loans this holiday season.
Houston, TX — (SBWIRE) — 11/20/2013 — The 2007/08 economic recession negatively impacted on most people’s lives where some of them lost their jobs making it very challenging to handle the debts that they owed. This resulted to late payments, missed payments, defaulting and foreclosures among other things that contributed to lower credit rankings. There are still many people who have not recovered from this up to this day.
The reasons mentioned above have left a considerable percentage of applicants to rely on online personal loans for bad credit since this is the best option they have for accessing cash. Applying through the web also comes with a lot of convenience since consumers are now able do this from any location provided they have internet connected PCs. This also saves a lot of time allowing borrowers to access the required amounts quickly.
In order to improve on efficiency, the company’s management team decided to upgrade the platform that applicants have been using and this has now been done. There are a number of things that were customized starting with the first step of application. The inquiry form is very brief and its simplified form will be making it very easy to complete. Its new design will also help to avoid common mistakes.
The team charged with the responsibility also oversaw the overhaul of the matching process to ensure that consumers’ details are accurately matched across the database of lenders. This was also a success and quotes on online personal loans for bad credit will be coming from the appropriate lenders. Display of these offers was also optimized to allow borrowers to compare them easily and within a short time.
Jason Clarke has already experienced the new changes and he commented that, “It’s quite unbelievable how they have simplified the application process and I was done with this step in just three minutes. I was very happy with the quotes I got and the funds were in my account within 6 hours. It’s really an amazing experience and I’m very sure that all the applicants will appreciate the company’s efforts.”
This company was started in 2011 and it has been adding lenders all along to develop the database that is currently in use. On making an application, consumers are issued with multiple offers to make their own choices and all this happens in a matter of minutes. Most borrowers are also able to access cash within 24 hours. Applications for online personal loans for bad credit should be forwarded through www.epersonalloansforbadcredit.com
A smaller share of applications for purchase financing converted to closings last month, while turnaround for all loans slowed. Credit scores on government originations fell even as conventional scores moved higher on refinances.
Out of all home loan applications started in the previous 90-day cycle, 51.4 percent closed in the month of October.
The closing rate worsened from 52.3 percent in the previous month and 54.5 percent in the same month during 2012.
A recent study by Genworth Financial finds that many people have unrealistic expectations about retirement.
Although 73 percent of pre-retirees are confident they will retire as planned, only 48 percent actually do. Some workers are forced to retire earlier than planned because of job loss, health or family issues.
Two things that used to be expected in retirement were that you only needed 70 percent of your income during retirement and that your income taxes would be lower. These things are not certain in todays economy. The Genworth study found that 65 percent of retirees found that their expenses stayed the same or increased during retirement. This is partially because many people start their bucket list when they retire or have more time to do expensive activates such as golf and traveling.
Another big reason expenses are more than expected during retirement is medical costs. This may well be your biggest expense during retirement. Anyone retiring before age 65 must deal with the total cost of health insurance. Once you reach 65, you probably qualify for Medicare. However, Medicare is not free. Medicare Part A covers hospital care. It is funded through payroll taxes that we pay while working.
Part B covers doctor visits and outpatient services. Part D covers prescription drugs. These two parts are funded with subscriber premiums. There is a sliding scale based on your income. If you withdraw a large amount of qualified funds to make a large purchase, it may increase your next years Medicare cost. This should be a consideration if you are making a Roth conversion while receiving Medicare.
Your Medicare premiums are calculated using the Medicare modified adjusted income. This is figured differently than MAGI figures used in other areas of retirement planning. To calculate yours, look at your 1040 and add line 37 to the tax exempt interest amount on line 8b. Remember, the premiums you are calculating are for a single person, so you need to double them for a couple.
While a Roth conversion while receiving Medicare will increase your cost, a conversion before starting Medicare can give tax free income that does not increase your insurance cost. Many people use tax exempt bonds to avoid the 3.8 percent Medicare surtax. This tax free income is included when calculating your Medicare cost.
It is important to consider medical costs while you are planning your retirement income. If you do not take this into consideration, you may not have enough funds to fulfill all of your retirement dreams.
Next week, we will look at all of the confusion with the Affordable Care Act. Many things are up in the air with the presidents announcement this week that some parts are being pushed back for a year.
To help you plan for Medicare, we are offering a free 24-page Life Guide…Social Security and Medicare. To get your copy, e-mail your name and address to firstname.lastname@example.org.
Gary Boatman is a certified financial planner and a local businessman who serves as president of the Monessen Chamber of Commerce.
Given the multiplicity of goals, how should a parent decide which one is more important? One should prioritise ones goals based on two main factors–the time on ones hands and alternate sources of funding the goal, says certified financial planner Jayant Pai. List your goals and the time in which you need to achieve them. Then, distribute the investible surplus among goals on the basis of the urgency of each goal.
You should choose to allocate a higher surplus towards your own retirement if you havent managed to build a sizeable nest egg. However, if you have a sufficiently large retirement corpus, you can allocate more towards other goals. Experts say retirement planning is paramount because you can get a loan for all other goals, but nobody lends for retirement. Yes, reverse mortgage is gradually catching on, but only the people with a house can go for this option.
The Indian parent is also an emotional investor, torn between his responsibility to provide for his childrens needs, and ensuring a golden retirement for himself. This is why child Ulips, despite their high charges, were of working people expect an inheritance from their parents. of retirees expect to leave an inheritance for their children. 86% 59% Rs 12.09 lakh Rs 26.78 lakh Median value Median value
Source: HSBC Future of Retirement 2013 survey Sacrificing for children can jeopardise your retirement planning, says Sakina Babwani. a big hit with insurance buyers at one time. Emotion is the last thing that should influence your decision. This is why it is not always prudent to allocate all your savings towards your childrens goals, says Pai.
Dont get us wrong. We understand that your childrens needs are paramount and you want to give them a leg up in life, but dont go overboard in doing so. Putting away a large chunk of your investible surplus in a house for your child is not a good idea if you have not built a sizeable nest egg. Besides, who knows whether your child would want to live there 20-25 years from now. So, you are diverting resources today towards things that your child might not want tomorrow. In most cases, children may not even need the money you are saving for them. As the HSBC survey shows, 86% of retirees plan to leave an inheritance for their kids, but only 59% of the working people expect something from their parents.
Retirees plan to leave more than youngsters expect to receive
Gift Financial Independence
The greatest gift you can give your child is financial independence. Delhi-based Apra Jain, 23, learnt the importance of saving as a kid. Today, I put money in equities instead of the piggy bank, she says. During her college days, she would get a monthly allowance of Rs 5,000, from which she began to invest in stocks. I started by putting in Rs 10,000 and gradually increased it to Rs 25,000 a month, all from my savings. Today, I invest Rs 10,000 every month in my portfolio, Jain adds.
As financial advisors, Gordo and Burrow were used to meeting with clients and trying to help them manage their money, but they were frustrated by how difficult that process could be. They wanted an easy way to give people an answer to those two big questions an assessment of their financial well-being and a road map for improving their finances. Thats why they developed FlexScore, which generates scores along with ideas for how to increase the score, based on a wide range of financial factors, including savings accounts, insurance policies and estate planning. Earning the maximum score of 1,000 means youre financially independent, Gordo explains. (The lowest score is technically a zero, but most beginners start closer to 150.)
We felt there needed to be one score for a person to rely on if they were trying to figure out if they were financially independent. Then, once you have the score, there has to be ways to improve. The combination of the score and the to-do list is the horsepower of FlexScore, Gordo says.
[Read: Why You Shouldnt Share Your Good Credit Score on Facebook.]
One tool within FlexScore allows users to model potential decisions, like buying a home, to see how the rest of their financial lives could be affected. Now you can make informed decisions about your life based on the scoring tool maybe Im way ahead of the game and can retire earlier or can buy that second home, Gordo says. Another tool provides a peer ranking, so users can see how they compare to people with similar profiles. An online FlexScore learning center offers videos explaining topics ranging from inflation to estate planning, and users earn points by watching them.
Recommended action items might include taking out more life insurance, getting a lower-interest rate credit card or learning more about estate planning. FlexScore refers users to related websites, such as Insure.com or Bankrate.com, which allows the company to earn referral fees. FlexScores business model also includes earning licensing fees from banks or other financial institutions that pay to incorporate the tool into their own websites for customers.
FlexScore also licenses the tool directly to financial advisors who pay a monthly licensing fee to use the tool with their clients. (However, anyone can use the core part of the tool for free by creating an account.)
And this is just the beginning. Gordo says he wants FlexScore to eventually replace, or at least be used in tandem with, credit scores as a way of measuring peoples financial health and ability to take on credit. Our aim is to become an industry standard by which people measure themselves financially. Its much more complete and complex than a credit score, Gordo says. The credit score is a black box logarithm that nobody understands. FICO invented it in the 1950s its very confusing, he adds.
[Read: How to Avoid Online Ticket Scammers.]
Gordo and Burrow have a long way to go to make that goal a reality. Kristine Snyder, a spokeswoman for the credit bureau Experian, says she is not familiar with FlexScore, although she says she cant see a score based on self-reported information being more valuable or more reliable than what is currently available today.
Anthony Sprauve, a spokesman for FICO, wrote in an email that the FICO score is the most predictive tool for evaluating consumer creditworthiness. We continually evaluate new and alternative types of data for use in our credit scores. However, we only incorporate such data into our scores after extensive scientific testing has proven that the data is predictive of consumer credit risk and after ensuring that such data is compliant with all fair credit laws and regulations, he wrote.
If you are in your 20s and have started planning for retirement, then you probably feel pretty lonely: A survey conducted two years ago by Scottrade suggests that four out of five young people have not yet begun actively planning for retirement.
If youre one of the smarty-pants 20-somethings that have already started to save for retirement, youre already winning. For every dollar you save in your 20s, you can reasonably expect a minimum tenfold return — and you could definitely see more.
Achieving a return that high, however, requires a lot of patience and perspective.
If you are in your 20s now, it will be 30 to 40 years before you touch any of the money youve diligently stored away. That means you can afford to put all of your retirement nest egg — thats right, 100% — in the most risky and lucrative investment medium there is: the stock market.
Consider this: Large-cap stocks yielded an approximate 10.4% average annual return from the mid-1920s through the mid-2000s. In rolling 30-year periods, even during the Great Depression, stocks beat bonds every time.
Investors in their 20s can establish a large portion of their nest eggs by getting totally invested in stocks at this early stage of the game. Time is your friend; it minimizes the risk involved with total stock asset-allocation because you have time to ride out the lows of the market.
This isnt the Wild West. There are a few rules you should follow if you want to maximize your returns and minimize your exposure to risk.
Rule No. 1: Dont put all your eggs in one basket
By investing 100% in stocks, you are already (sort of) putting your eggs in one basket, so spread the love around. Index funds are a great way to gain exposure to a variety of stocks for a lower cost than a managed fund. The Vanguard Large-Cap ETF (NYSEMKT: VV) is a good place to start for new investors. This fund offers a sampler of some of the largest US stocks and will save you a fortune in fees in the long run. ETFs offer a lot of flexibility: You can buy and sell them like stocks, and you dont need to have a lot saved up before you can purchase a few shares.
Alternatively, if you want to get broader stock-market exposure and you have a little more to spend, consider the Vanguard Total Market Index Fund (NASDAQMUTFUND: VTSMX) . This fund offers about 30% of mid-cap and small-cap exposure in addition to its large-cap holdings. This fund has a $3,000 minimum initial purchase, but many brokerages offer monthly periodic investing in mutual funds after you make your initial purchase, which will help automate saving.
Rule No. 2: Avoid target-date funds
The idea of avoiding any actual retirement planning by tossing your money into a target-date fund is alluring. These funds allow investors to pick their target retirement year, and they supposedly provide an asset allocation that is risk-proportionate to the investors time horizon. These funds, however, are often too conservative for young investors who have time on their side.
For example, the T. Rowe Price 2055 Retirement Fund (NASDAQMUTFUND: TRRNX) is invested 10.53% in cash and bonds. Investors in this fund are more than 40 years from retirement, and theres no reason they should have any portion of their portfolios in bonds or cash. This reduces the funds potential return, and on top of that, investors will lose even more to management fees, which are significantly lower among passively managed index funds.
The long haul
Riding out the highs and lows of the market is the hardest part about being fully invested in the stock market. Once you get past the psychological barriers, however, you will find that the rewards are great down the line. Putting away a little now will give you more freedom in your career, more confidence in your future, and more options in your life. Your future self will marvel at how smart you were.