A recent article on Marketwatch.com discusses a body of research showing that homeowners of all stripes should consider using a reverse mortgage in conjunction with their portfolio-withdrawal strategy. According to the research, such loans, where you borrow from the equity in your home, can help you preserve your nest egg, leave a legacy, or both.
The story is based on in-depth research project by Wade Pfau, a professor of retirement income at the American College of Financial Services in Bryn Mawr, Penn, in which he compares and contrasts ways to incorporate home equity into a retirement income strategy along with the traditional portfolio.
A reverse mortgage is as a loan available to homeowners who are 62 years or older that allows them to convert part of the equity in their homes into cash, monthly term or tenure payments or a line of credit. The difference in a reverse mortgage vs a traditional mortgage is that instead of the borrower making monthly payments to a lender, the lender makes payments to the borrower.
Even though the 100th Birthday of the National Park Service on August 25, 2016 will be one of the parks free days, if you’re 62 and older and still haven’t purchased your lifetime Senior Pass for a mere $10.00 you’re definitely missing out on a great deal. You can use the Pass at 2000 Federal recreation sites across the nation, including National Parks, National Wildlife Refuges, and many National Forest lands. With over 400 National Parks alone, you’re bound to find one in your vicinity or you can plan the perfect road trip.
The best way to purchase your pass is at one of the Federal recreation sites where you can get your pass for just $10.00 as long as you provide photo identification to verify that you are a US citizen or permanent resident over 62 years of age or older. If you are unable to pick one up in person, you can obtain your Senior Pass through the mail for $20.00 but you must complete an application form and provide a copy of your proof of citizenship or residency. The $20.00 fee includes your pass and an additional $10.00 processing fee. Still not a bad deal for a life-time pass. The National Parks Service no longer issues Golden Age Passports but if you already have one, these passes will continue to be honored according to the provisions of the pass.
The park website states that “the Senior Pass admits the Pass owner and any passengers traveling with him/her in a non-commercial vehicle at per-vehicle fee areas or the Pass owner and three additional adults where per-person fees are charged.”
On August 25th, 2016, National Parks nationwide will be celebrating centennial events to celebrate 100 years and to welcome in the new century. You can find a park near you at findyourpark.com where you can browse parks by State or search for a park. More details about the National Parks Senior Pass and where you can go to purchase one can be found here.
There’s been a lot of hub around the internet this past week regarding President Obama signing the Bipartisan Budget Act of 2015 that limited two very popular Social Security claiming strategies known as “restricted application” and “file and suspend.
Both the “restricted application” and “file and suspend” strategies have been part of many married couples and divorced individuals retirement plans and many people have used them through-out the years to boost their payouts. So what if you’re approaching retirement and had planned on using one of these strategies? It turns out that some retirees can be grandfathered in and some may have to revisit their retirement strategies for future income planning.
The following compilation of up-to-date social security facts and strategies from around the Web that will help clarify these new rules and help in determining which options, if any, are still open to you so you can make plans accordingly:
If you’re married, there are now 3 sets of rules you need to be aware of when planning for social security.
The File and Suspend rule changes do have certain grandfathering provisions, especially for those nearing age 62 or age 66. It is thus crucial that you understand the state of your Social Security benefits because immediate action could be required.
With the new changes to social security, you’ll need to do some careful retirement planning, quickly. Here’s what you should know to use these retirement strategies while you can.
It appears that the US Department of the Treasury isn’t happy with the fact that millions of Americans aren’t saving, or saving enough, for retirement and so they have come up with a new way to try to combat this and encourage people to start saving with the introduction of myRA.
myRA is essentially a roth IRA saving account that allows people to contribute up the maximum allowed per year for Roth IRAs ($5,500 or $6,500 per for year for those age 50 and over). The main difference, though, is that it’s designed specifically for new retirement savers who don’t yet have a current employee retirement plan, it costs nothing to open, has no fees, no risk of loosing money and allows savers to contribute any amount they choose from just a $1.00 up to the maximum allowed.
Note that there are limitations in that people can only save a maximum of $15,000 or a lower balance for up to 30 years, at which point their savings will need to be transferred or rolled over into a private sector Roth IRA.
Contributions, they say, are invested in a new United States Treasury security which earns interest at the same variable rate as investments in the Government Securities Investment Fund in the Thrift Savings Plan for federal employees. Their website states this fund earned 2.31% in 2014 and an average annual return of 3.19% over the ten-year period ending December 2014.
myRA allows people to fund their account in a variety of different ways such as their paycheck, checking or savings account or even all or part of their federal tax refund.
myRA makes it perfectly clear on their website that this form of savings is not meant as a replacement for 401(k)s or other types of employer-sponsored retirement savings plans as it lacks many features of these plans, such as matching contributions and investment options, which remain a great benefit for those with access to such plans. It does, however, encourage employers lacking retirement plans to share myRA information with their employees and has a complete employer resource section on their website.
You can learn more about myRA works on their website or by viewing the video below.