Archives for July 2017

Ahhh, summer. The time of year when our thoughts turn to swimming, frozen treats, and … moving? Reports indicate that summer is the most popular time to relocate, with 48 percent of moves happening between May and August.

In May, the National Association of Realtors announced existing-home sales are forecasted to jump 3.5 percent in 2017, to its highest level in a decade. This increase is expected despite the probability of rising mortgage rates; the Mortgage Bankers Association is projecting that the average rate for a 30-year fixed-rate mortgage will be 4.7 percent by the fourth quarter of this year, up from 4.32 percent at the end of 2016.

Are you considering making a move this year? If you have a house to sell, here are some things you might want to do before your listing goes live.

• Write down your projects. Your house is likely to sell more quickly if it looks fresh and clean to potential buyers. Go into each area (be sure to include the garage and yard!) and make a list of projects that need to be done there. Do the carpets need to be cleaned? Could the walls use a fresh coat of paint? Make a checklist of all the projects, and assign a target completion date for each.

• Declutter. A full house looks like a smaller house. To make yours look bigger, start clearing out anything that’s not crucial to daily living. Sell unwanted items at a garage sale or donate to charity. If you have items you want to keep for your next place, consider renting a storage unit to house your stuff temporarily.

• Get a CLUE. There’s a free tool out there called the “Comprehensive Loss Underwriting Exchange,” or CLUE. This is a database that contains information about insurance claims made, going back seven years. Only the owner of a property may access its CLUE report. Not only can you examine what’s in the report and get ahead of any inaccuracies, but you can also make copies of a report for potential home buyers.

• Interview Realtors. If you’ll be listing your house with an agent, it’s OK to ask for an initial interview. This is a great time to ask your potential Realtor about their marketing strategies and determine if your expectations and personalities are a good match.

The Bottom Line on Your Home Sale

You’ve listed your home for sale, and you’ve already done the math to see how much you’ll be making if your house sells for full asking price. But hold on — that number isn’t the actual amount you’ll be seeing in the end. Here’s a look at some expenses you might incur to get your home sold.

1. Realtor commission. Listing agents typically make about 6 percent commission on the sale of a home. For example, if you’re selling your home for $200,000, a 6 percent commission equals $12,000.
2. Closing costs. Both parties — buyer and seller — have closing costs. A seller should anticipate closing costs of around 2 percent of the final selling price, but they could be higher.
3. Credits to the buyer. Maybe you’ve agreed to a credit to the buyer for something like the carpet or the siding. That credit will come directly off your bottom line.
4. Home projects. Remember those projects you completed before you put the house on the market? A can of paint here, a carpet cleaner there — all of those expenses can add up, but they can be well worth the investment.
5. Moving costs. Hiring professional movers can be worth it, but it can be expensive. Remember to include the cost of movers in your projected expenses.

Getting the Word Out on Your New Address

No matter if you’ve lived in a place six months or 60 years, a lot of companies have your address. It’s a good idea to sit down and make a list of all the places and people you need to contact to update your information. Lifehacker.com gives some great suggestions to get you started:

• Post office
• Employer
• Financial institutions — banks, loan companies, financial advisor, credit card issuers
• Insurance companies — life, health, car, home
• Utilities
• Service providers — doctors, dentists, lawn care, housekeeper, etc.
• Subscriptions and memberships
• Government — Social Security, motor vehicle department, etc.
• Online Services — Amazon, Netflix, etc.

To save yourself some time, check the organization’s website first to see if you can make address changes online. Many companies allow you to update all of your information through their websites, letting you avoid long hold times on the phone. Even the U.S. Postal Service will let you change your address online for a $1 fee.

You may not have thought of this until day three of your retirement, but a change in lifestyle usually means a change in wardrobe. Even if you didn’t wear a suit to work, whatever you did wear may not be the most comfortable option for reading, fitness, yard work and romping around with the grandchildren.

While you no longer have to dress to impress at work, bear in mind that perception is still important in the real world. You don’t want to be perceived as really old or as trying to act too young. Dress your age with a focus on comfort, fit and quality materials.

If you start a regular exercise regimen in retirement, you may even lose weight — so don’t go out and buy too much at first. But do consider buying some good-quality, comfortable workout clothes that reflect your style.

 

One way to deal with the issues some men face in retirement is to keep working. A recent study from Oregon State University found that people who retired at age 66 were 11 percent less likely to die from any cause than those who retired just one year earlier. It turns out that the daily grind of work and responsibility that some men feel throughout their careers actually works to their advantage as they get older.

Researchers believe that the cognitive and social stimulation that work provides can help lower stress levels and make you more attuned to your body’s needs. This, in turn, can lead to eating healthier, engaging in regular exercise, taking any prescribed medications and making regular doctor’s visits. You could say that work gives you a sense of purpose — to live longer, to provide and to be responsible for loved ones.

Studies have confirmed that retirees who stay active and involved tend to avoid or better cope with common retirement concerns. If you need more to do with all that spare time, consider pursuing a hobby you enjoy or starting a new one. You want to find some type of exercise that you enjoy and can stick with for the long term. That may include playing tennis or golf, but consider adding another activity that will be there for you once your body says it’s time to slow down. The earlier you make regular fitness a common, everyday routine, the more likely you are to continue it when you’re much older — and need it more to help maintain mobility.

Think about ways you can give back, because this will help restore some of those feelings of responsibility and being a provider that you might miss during retirement. How about volunteering with a charity or church group? Another way to stay intellectually engaged is taking up studying a subject that interests you. Take an online course or go back to school, even just to audit classes at your local college. This will give you a place to go, a time to be there, people to engage with, opportunities to think creatively and intellectually, and the opportunity to walk around campus for daily exercise.

The important thing is, don’t get set in your ways with static days that do not include exercise, social and intellectual engagement. Get out there and engage with the world — the energy you invest in these pursuits can provide strong returns in retirement.

We frequently read about the challenges retiring women may face — less income, higher health care costs and outliving their spouse. But what about men? It can be difficult for some men to retire after a lifetime of working outside the home. Not only do they miss the intellectual stimulation and daily camaraderie of colleagues, but they may have a sense of loss in not receiving a regular paycheck.

Suddenly, there is money coming in, but because they didn’t spend the two weeks prior working for it, it can create an odd feeling. Then there’s the issue of how to spend their time now that they have all day, every day, free and clear. Men have to familiarize themselves with the daily rhythms of the household, settle into longer and closer proximity with their spouse, and figure out the delicate balance of spending more time together without stepping on each other’s toes.

Just like every stage of life, retirement takes a bit of work. If you’re not aware of and proactively working to counter potential retirement-related issues, you could be in for a rough patch. According to a recent study, the following are some of the most common problems men face when they retire:

• Identity disruption since who they thought they were revolved around their job
• Decision paralysis
• Diminished self-trust
• An inability to form new relationships
• An inability to find a purpose for continued living
• Death anxiety

The important thing to realize is that you’re not alone; even if you live alone. There are other men just like you who are facing the same issues, feelings and concerns of adjusting to retirement. Go forth, see old friends and make new ones.

Today, only about one-third of America’s retirees have a pension plan, which is quite different from the reliability of employer-sponsored retirement income of the past. In fact, pensions used to represent one-third of the three-legged stool that represented a confident retirement, in combination with Social Security benefits and personal savings and investments.

Employees who don’t have a pension plan may have a defined contribution plan through work, such as a 401(k), 457 or 403(b) plan. Employers gradually have been transitioning their retirement plans from defined benefit to defined contribution as a cost-cutting measure. Yet according to research conducted by the Center for Retirement Research at Boston College, today’s employer-sponsored retirement plans are not providing as much income as in the past. Moreover, the transition from defined benefit to defined contribution plans appears to offer more advantages to employees who have a higher education and higher earnings.

The reason traditional pensions offer better retirement income protection is that they typically are guaranteed to last for life. However, providing guaranteed lifelong income is an expensive benefit for companies to provide, particularly now that retirees are living longer. But without a pension, the responsibility of providing for retirement income falls more to the individual.

One way for individuals to create steady and reliable retirement income is to use a portion of their accumulated 401(k) or other retirement plan assets to purchase an annuity, which also offers income for life guaranteed by the issuing insurance company. A second form of retirement income comes in Social Security benefits.

Combining an annuity with the rest of their retirement savings and investments, as well as Social Security benefits, can help individuals work toward their retirement income goals. We are happy to discuss your options for guaranteed income in retirement. Give us a call, and we can talk about whether an annuity may be appropriate for you.

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice.  Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.