10 Steps to Prepare for Retirement

10 steps to retirement from AARP

1. Define Your Retirement

2. Take Stock of Your "Assets"

3. Evaluate Your Health — Now

4. Determine When to Collect Social Security

5. Network Through Social Media and Other Methods

6. Decide How Much You Want (or Need) to Work

7. Create a Retirement Budget

8. Find New Ways to Cut Your Expenses (Start Saving More)

9. Prepare for the Unexpected

10. Stick to Your Plan (Our Community Can Help)

Read the details at: http://www.aarp.org/readyforretirement

Social Security Benefits Calculator- When to claim

Deciding when to claim SS retirement benefits is critical to one's long range financial security and much more complex than most people imagine. It is NOT simply a matter of deciding at what age one will retire and start benefits, especially for someone who is currently married,widowed or divorced. Here is a link to a great tool to explain the options and help decide. 

"AARP announced the launch of its Social Security Benefits Calculator, a unique interactive tool designed to help people make the complex but critical decision of what is the best age to claim Social Security benefits to meet their financial goals. The calculator is part of AARP’s new “Ready for Retirement?” effort, a ten-step approach to envisioning and planning for a secure retirement, which includes creating a budget and preparing for the unexpected."

AARP Press Release AARP Launches Social Security Benefits Calculator

To try out the new AARP Social Security Benefits Calculator, visit www.aarp.org/socialsecuritybenefits

Utah in top 5 for Ponzi Schemes

Last year the FBI labeled Utah as one of its top 5 states for Ponzi (pyramid) schemes. Now a new study confirms that Utah is #5 in the nation on the "Ponzi Prosperity Index."

Ponzi schemes promise outrageous investment returns and use money from new investors to pay the initial investors who brag to their friends and family to suck them into the scheme. Does no one remember Bernie Madeoff and his promises of guaranteed, safe returns?? No investment return is guaranteed. The new study shows that religious group members are Ponzi targets about 30% of he time (based on trust of religious leaders and co-worshipers). The elderly and retired people are also prime targets (because that's where the money is).

For at least the past 3 decades The Salt Lake Tribune has been published articles about "affinity group" investment fraud and today's (June 29) paper reminds readers to be very wary of unrealistic promises of safe, high investment returns. Keith Woodwell, director of the Utah Division of Securities is quoted in the article, "I would say it is probably closer to 50 percent of the scams we see in Utah that are marketed based on some type of affinity group." Be skeptical and help educate your friends and family (particularly seniors) about Ponzi schemes and affinity fraud.

Read the details at: http://www.sltrib.com/sltrib/money/52091892-79/ponzi-utah-state-fraud.html.csp

So You Think You Know All About Credit Scores...

http://www.creditscorequiz.org/ is a new website to educate consumers ahead of new regulations’ poised to dramatically affect borrowers.  CreditScoreQuiz.org is an interactive quiz that lets you test their understanding of credit scores and improve your understanding of how your credit scores affects the cost of borrowing money. Compare your score to the national average. After you take the quiz be sure to check out the resources page http://www.creditscorequiz.org/resources/
 
While you’re at it, don’t forget to get a free copy of your credit report once a year from each of the three national credit reporting companies at annualcreditreport.com or by calling 1-877-322-8228.

P.S. I teach this stuff and I didn’t score 100%.

Beware Business Credit Card Solicitations

Four U.S. Senators urged the Federal Reserve to crack down on business credit card marketing, because the cards do not come with many of the protections that are standard on basic consumer credit cards. According to the Wall Street Journal the senators want the Fed to require credit card companies to improve disclosures on the business cards and clearly warn consumers that the cards are NOT protected by the latest regulations that have reined in billing practices such as sudden interest-rate hikes. Each month lenders send out 10 million offers to consumers for professional credit cards, according to a study by the Safe Credit Card project at Pew Charitable Trusts, a Washington, D.C.-based consumer-advocacy group. See: http://www.pewtrusts.org/our_work_detail.aspx?id=616

Second point: register to Opt Out of credit card solicitations to cut down on junk mail, wasted trees & paper, and to protect against ID theft from stolen solicitations. Sign up at OptOut Prescreen:  https://www.optoutprescreen.com/?rf=t

Save up to $1/gallon of gas

I don’t like to promote specific retailers in this blog but I was pleasantly shocked recently when I bought gas at Conoco on 400 North in Logan and saved 90 cents per gallon!! 

I’m used to the old system of saving up to 15 cents/gallon by swiping my Smith’s fresh values reward card when buying gas.  When I shopped at Smith’s yesterday I noticed the sign claiming you can save up to $1/gallon. With the vacation travel season starting, this is a great deal.   

I shop at Smith’s Marketplace because it is close to my home so I can walk, ride my bike, or stop on my way home with the car (saves time and money to shop close to home).  Students in the “Consumer in the Market” class at USU do a comparison shopping project each semester and their studies show there is not a consistently cheapest grocery store in town.

Get a Life You Don't Need a Million to Retire Well

Get a Life: You Don't Need a Million to Retire Well
While I'm always encouraging people to invest more for retirement, this is one of my favorite books.  Read a free chapter online at: http://www.nolo.com/products/get-a-life-LIFE.html

"The financial-service industry wants you to believe that in order to avoid financial destitution, you need to put aside huge amounts of money that you -- let's say it together -- "should have begun saving years ago."

Not true, states Ralph Warner, Nolo co-founder and the author of Get a Life. Although a sensible savings plan makes good horse sense, many other actions and decisions will determine whether you enjoy your retirement years.

Get a Life shows you how to beat the anxiety surrounding retirement, and to develop a plan to make your golden years the best of your life by:

•     developing family relationships
•     maintaining and creating friendships
•     improving health
•     keeping active
•     developing a robust curiosity for the world
•     realistically calculating how much money you need and how to secure it

The 5th edition provides the latest research and studies that show physically and mentally active retirees live longer and enjoy happier lives."

Social Security Fix-it book

Confused about Social Security? Worried that it won't be there for you? Frustrated with the lack of action by Congress to deal with the looming financing problems? Wondering who to believe?

The non-partisan Center for Retirement Research at Boston College has produced an easy to understand educational tool to clear up the confusion and point the way toward a reasonable solution: "Everything the earnest but overburdened citizen needs to know about the Social Security financing shortfall and the leading proposals for addressing the problem."

Available at:
http://crr.bc.edu/images/stories/Special%20Projects/social_security_fix-it_book.pdf

This colorful, illustrated, easy-to-understand booklet explains the problem (No, SS is NOT going bankrupt!) Decide for yourself (and your multi-generation household) what steps you would like your Congressional representatives to implement to resolve the funding problem before delay makes it worse. Go ahead! Click the link above. I think you will be pleasantly surprised to discover that the problem is solvable.

Natural Disaster Planning and Recovery

It's been almost a month since my last post because my husband and I have been on a 4,000 miles motorcycle trip from N. Utah to Maryland, a trip that will be remembered as the 'natural disaster' tour!

We rode along the Louisiana coast that was devastated by hurricane Rita in 2005 where we saw lots of empty concret pads where homes used to be. A section of beach that used to hold 250 homes now has a dozen, all new since Rita. Although we did not see the worst of the massive Mississippi River flooding, we rode through portions of Louisiana that are now being inundated. I've got photos of prisoners filling sandbags and we stood on a levee watching the water rise in Morgan, LA. 

As we headed north from the Gulf we saw the first examples of tornado damage near Jackson, MS. From there north through Alabama, Tennessee, Georgia, N. Carolina and Virginia we viewed extensive tornado damage and passed a number of FEMA disaster recovery stations. Just 150 milies short of our destination we spent two nights in a motel to avoid the severe thunder storms; I was so glad we did as a (thankfully small) tornado struck Frederick County, MD, our destination, that day.

Right now some Utah homeowners are cleaning up after or preparing for the inevitable flooding as our massive snow pack starts to melt. I remember well the flooding of spring 1983 & 84. But our biggest risk for extensive damage in Utah (and other western states) is earthquakes. For actions to take to make your home safer during an earthquake use the search festure of this blog (type: earthquake).

But the purpose of this post is to feature a new resource for disaster recovery, Recovery After Disaster: The Family Financial Toolkit, developed by the University of Minnesota Extension and North Dakota State University Extension Service, in partnership with Lutheran Social Service. The Cooperative Extension Service provides adult education throughout the U.S. This excellent resource is available at: http://www.extension.umn.edu/family/tough-times/disaster-recovery/docs/financial-tookit-all.pdf

BUT don't wait until disaster hits to take some important steps. Unit 5 is a good summary of what everyone needs to know about their current financial status. Units 6 & 7, Where will I live? are a good reminder of the need for renters insurance and the portion of HO insurance that pays for you to live elsewhere if your home is not habitable. Do you have a detailed and current home inventory, with photos, to document your possessions? Besides a copy at home, keep a copy in your safe deposit box, and with a relative or friend who lives in a different community. USU Extension's publication Take Charge of Your Money can help you get started. http://extension.usu.edu/files/publications/publication/FL_500.pdf

Now is the time to talk with your homeowners' insurance agent to be sure you have appropriate coverage; remember that HO insurance specifically excludes coverage for lood and earthquakes. You need to purchase separate policies and your agent can help with the process. It seems that no one is immune from natural disasters so don't kid yourself and don't delay.

Did you get a big income tax refund?

Three-quarters of taxpayers overpay Uncle Sam; the average federal income tax refund last year was $3,003!  I know that economic psychologists tell us people love to get those refunds of overpaid taxes; they feel like it is a windfall. But it is totally irrational. (I wonder how many tea party-ers over pay their taxes.) If you carry a balance on a credit card, it's crazy to over pay your taxes! Reduce your withholding and direct those funds to paying down that high interest debt faster.  If you don't have a substantial emergency fund, reduce your withholding and set up an automatic deposit to an online savings account as a painless way to save. No Roth IRA? T. Rowe Price will let you start an individual retirement account with as little as $50/month with an automatic investment plan. Unfortunately, too many consumers splurge on consumer purchases with their refund money (note all the advertising to get you to use your refund to buy furniture, TVs, etc.) rather than investing it to secure your future. Nag, nag, nag... don't be a bag lady in your old age!

Adjust your W-4 withholding using the website: http://www.irs.gov/individuals/article/0,,id=96196,00.html