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Mar 252017
 

(BPT) – Retirement can seem like a very distant destination in your early working years. However, as you age, that once distant destination starts to become more real. As you enter your 50s you can really start to think about how much you have saved and how that will translate into retirement income. You can also start to better understand the idea of allocating part of your retirement nest egg to guaranteed income based on your calculation of how much pension income and Social Security you will receive. Also critical during this final phase of working is understanding the key retirement milestones and how they will impact your ability to retire.

The following are the critical retirement milestone ages:

Age 55

If you are fortunate enough to consider the possibility of an early retirement, attaining age 55 is a critical date since you can start withdrawing from your 401(k) without the application of the 10 percent penalty tax applicable to premature plan distributions. This exception from the general applicability of the penalty tax, however, depends on you retiring from the company sponsoring your 401(k) plan during or after the year you reach age 55. You cannot continue to work at the company and decide you want to start using your 401(k) assets at age 55. In that circumstance the 10% penalty tax will still apply.

Age 59 1/2

At age 59 1/2 you are no longer subject to the 10 percent penalty tax for premature withdrawals on all of your retirement assets, such as your IRAs, 401(k) or annuities. Therefore, for many this is really the earliest that one can consider retirement as a possibility. Of course, retirement at age 59 1/2 will increase the length of your retirement and the risk that you will outlive your assets.

Age 62

At age 62 you become eligible for a reduced Social Security benefit. In terms of managing your guaranteed income for retirement, in general you will be better served to not start taking Social Security at such a young age since the benefit will continue to grow. Only those with a shortened life expectancy should consider starting Social Security benefits at this age. And even someone with a shortened life expectancy might consider delaying benefits if married, since turning on benefits early will reduce a surviving lower earning spouse’s benefit. Unfortunately, the reality is many individuals do turn on their benefits at age 62, either because they have not saved enough for retirement or because they want to start getting money back from the system they have contributed to over the years.

Age 65

Age 65 is a critical year for considering retirement since you will become eligible for Medicare. Prior to age 65, retirement requires you to consider the cost of paying for your own health care insurance, which can be a very costly proposition. This health care analysis gets more complicated if you have a spouse who is not working and has not attained age 65 when you do, since you will need to consider the cost of health insurance for that spouse until he or she attains age 65. While the Affordable Care Act (ACA) has helped ensure that you can obtain health insurance regardless of your medical condition, the cost of such health insurance remains a significant deterrent to those considering retiring before Medicare eligibility. Also, as this is written, Congress is planning to repeal and replace the ACA, and you will need to understand the replacement plan and how that impacts health care planning for those who are not Medicare eligible.

Age 66-67

At this age you will become eligible for full Social Security benefit payments, and not the reduced payment you can take at age 62. The full retirement age has been raised over time and varies depending on your year of birth. For those born from 1943 through 1954, age 66 is the full retirement age. For those born in 1955 through 1959, the full retirement age is 62 plus 2 months for each year. For example, someone born in 1955 has a full retirement age of 62 and 2 months, and someone born in 1958 has a full retirement age of 66 and 8 months. For those born in 1960 or later, the full retirement age is 67. Bear in mind that while attaining the full retirement age allows you to take an unreduced Social Security benefit, it does not maximize the benefit payment.

Age 70

Age 70 is the delayed Social Security benefit age, or when you must start taking your Social Security payments. By delaying to age 70 you can increase your full retirement age benefit by 8 percent a year from your full retirement age. Given that Social Security is an annuity that pays you for your lifetime, and the benefit itself is increased by inflation costs each year, the increase in benefit payments from the full retirement age to age 70 can have a material impact on your benefit payment in future years. Maximizing Social Security should be your first consideration when thinking about how to ensure that your assets last as long as you do. Unfortunately, many nearing retirement do not understand the importance of maximizing this benefit, from an insurance perspective, and take the reduced payout at age 62 or at the full retirement age.

Age 70 1/2

At age 70 1/2 you must start taking Required Minimum Distributions, or RMDs, from your retirement assets such as your 401(k) or IRA. Your RMD amount is determined by an IRS table, which effectively requires you to take an increasing percentage of your assets. The idea is that you will be forced to liquidate your account gradually over your lifetime. For example, at age 71 the table requires you to take out around 3.77 percent of your account value, determined on Dec. 31 of the year prior to the RMD withdrawal. At age 80 you must take out around 5.35 percent. At age 90 you must take out around 8.77 percent. You have a choice for the year in which you attain 70 1/2 to take your first RMD amount in that year or defer the distribution to before April 15 of the following year. Keep in mind that if you do defer this first RMD amount you will have to take two RMD amounts in the following year. You may want to consider carefully whether this makes sense since you could be increasing your overall tax liability.

RMDs are not required from a Roth IRA but are required from any funds you have in a Roth account in an employer plan. You may want to consider rolling funds, for example, from a Roth 401(k) to a Roth IRA, if you want to eliminate RMD requirements on these funds. You should know, however, that the time you have invested in the Roth 401(k) does not carryover to the 5-tax-year period for income tax free withdrawals from a Roth IRA. So if that is part of your future strategy, you may want to open a Roth IRA ahead of time to start the 5-tax-year clock running, which could include making a Roth IRA contribution or converting some traditional account assets to a Roth IRA. Once the 5-year-clock has run it applies to all future contributions, even if a particular contribution has not been in the account for 5 years.

The above analysis of retirement milestone ages highlights the importance of delaying your retirement as long as you can. Delaying your retirement ensures that you will not be subject to the 10 percent penalty tax on premature distributions from retirement plans and IRAs, that you will have affordable health care coverage under Medicare, and that you will maximize the Social Security lifetime benefit payment. Importantly, it also reduces the length of your retirement which, of course, increases the likelihood that you will be able to make your retirement assets last as long as you live.

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Mar 232017
 

(NC) Homes that show well and have great features typically sell faster than their counterparts, sometimes for a premium. If you want your home to stand out, a little effort can go a long way. Try these tips to create an enticing first impression.

  1. Clean. A neat, clean home shows pride of ownership and suggests that it is well maintained.

  2. Paint. Opt for a neutral colour so buyers will feel like there’s one less thing to do before moving in. Grey, beige or the popular combination known as “greige” are always a hit. A fresh coat of white paint on trim will brighten the rooms.

  3. Highlight your home’s energy efficiency and green features. This is increasingly a big selling point, especially among younger buyers. New insulation that offers superior thermal performance and increased fire resistance, like Roxul Comfortbatt and Safe ‘n’ Sound, represent long-term savings and benefits to potential purchasers. Smart thermostats and low-flow water fixtures are also coveted.

  4. Consider replacing worn flooring. Another lower-cost option is to give your floors a makeover by refinishing hardwood or shampooing carpets.

  5. Make simple updates. New light fixtures or hardware on cabinetry can provide your room with an instant refresh. Give cabinets a new coat of paint if they look tired or dated.

  6. Let there be light. Replace heavy drapes with sheer window coverings or valances to flood the home with as much natural light as possible.

  7. Open up the space. Remove excess furniture and all signs of clutter. Organize closets and pantries. Open windows to allow the fresh air in.

  8. Neutralize décor. Remove personal photos. Add inviting elements like fresh flowers, throws or toss cushions.

  9. Create curb appeal. Clean and pressure-wash the driveway and walkways. Cut the grass, pull weeds, and trim shrubs. Consider planting annuals for fresh pops of colour. Paint your front door and house numbers, if needed. Stage the patio furniture to create the feeling of an outdoor retreat.

  10. Throw down the welcome mat, and let buyers take it all in.

Not ready to sell? These tips also work well to revitalize a much-loved older home.

Scott McGillivray is host of the hit TV series Income Property and Moving the McGillivrays on HGTV Canada, a real estate investor, contractor, author, and educator. Follow Scott on Twitter @smcgillivray.

www.newscanada.com

Mar 182017
 

(BPT) – If you’re struggling to make ends meet in retirement, you’re not alone. And when your income is limited and fixed, you do your best to cut out unnecessary expenses.

One expense that can be tough for some seniors to manage is the premiums on their life insurance policies. Perhaps your carrier raised your premium unexpectedly, maybe the costs from a health event have strained your budget or it could be that your retirement fund is just running low. If you feel your life insurance premiums are too expensive, you may decide you no longer need the policy.

Alternatives to surrendering a policy

Unfortunately, many seniors think their only option in this situation is to lapse or surrender the policy. In fact, each year seniors older than 70 lapse or surrender more than 710,000 life insurance policies, with a combined face value of more than $57 billion, according to the Life Insurance Settlement Association (LISA). However, you have alternatives that are more beneficial than simply surrendering the policy. For example:

  • You could maintain the policy through loans against its current value;

  • You might be able to seek an accelerated death benefit, allowing you to take some cash out now;

  • The policy may be convertible into a long-term care health insurance policy, or if it’s a term policy you might be able to convert it into permanent life insurance;

  • Reducing the death benefit to a lower face value could lower the premiums, making the policy more affordable; or

  • You could assign the policy to an individual or a non-profit organization as a gift.

Another option to lapsing or surrendering the policy – one that can actually put the most amount of cash directly into your pocket – is to consider selling it through a life settlement transaction.

Selling a policy

Life insurance is personal property, so you can sell it just like any other property you own. When you decide to sell the policy to a third party – rather than surrendering it to the insurance company – you get more than the cash value, but less than the death benefit amount. The buyer of the policy takes on all future premiums and receives the death benefit when you pass away.

In order to qualify for a life settlement, you must be 65 or older with a life insurance policy that has a death benefit of at least $100,000. The amount of your settlement will depend on several factors, including:

  • The death benefit, which is the amount the buyer will receive when you pass away;

  • The amount in annual premiums that the buyer will pay; and

  • The number of years the buyer can expect to continue paying the premiums.

On average, a life settlement yields seniors seven times the amount of the policy’s cash surrender value, LISA says, based on an analysis of a survey by the U.S. Government Accountability Office. In fact, 90 percent of seniors with lapsed policies say they would have considered selling it if they had known life settlement was an option, an Insurance Studies Institute survey found.

To learn more about life settlements, how they work and if you’re eligible, call (888) 521-8223 or visit LISA’s website at www.lisa.org.

Mar 172017
 

(NC) Car owners and those in the market for a new vehicle face a tough task when it comes to determining value and asking price before a sale. No one wants to make a poor decision when they are buying and selling a vehicle.

While the process itself can be overwhelming, taking time to conduct thorough research, gathering information from forums and auto experts alike, will help to drive a successful sale.

“Knowing your vehicle’s value is crucial to a good sale, but preparation really is the key to success,” explains Michael Bettencourt, managing editor at autoTRADER.ca. “It’s important to do your homework. This means using online tools to seek second opinions, reading reviews and checking in with multiple dealers to gather as much information as possible to negotiate a deal with confidence.”

Here are some key points Bettencourt says sellers and buyers can consider:

  1. Vehicle information. The year, make, model and trim level will all have in impact on the market value of the vehicle. Other factors like quality and reliability ratings or owner satisfaction surveys can all be found online, taking the guess work out of finding your vehicle’s value. Resources like autoTRADER.ca easily allow consumers to browse hundreds of thousands of vehicle listings, offering the ability to sort by make, model, mileage, features, price and even colour.

  2. Vehicle condition and history. The mileage and overall condition of the vehicle are very important elements to consider. From scratches and scuffs to wear and tear and observance of a regular maintenance schedule, these factors will all have an impact on value.

  3. Supply and demand. With some exceptions, simple economics state that the more common a vehicle is, the more challenging it will be to negotiate a higher price. Browsing listings online will allow you to gauge the popularity or rarity of a certain model. Sharing information on these and other factors with potential buyers will help you negotiate a fair price.

  4. Seasonality. When it comes to convertibles or seasonal recreational vehicles like motorcycles, snowmobiles, boats or RVs, the demand will fluctuate with the time of year. If you’re buying, score the best price by checking out the market during off-peak season, and vice versa if you’re selling.

www.newscanada.com

Mar 162017
 

(NC) One of the very best financial decisions you can make for you and your loved ones is to write a will. It is astonishing how many people in Canada do not have one — more than half, according to some estimates. For some, just knowing where to start can be an obstacle.

For others, maybe it does not seem urgent, but dying without a will could mean that your property will not be distributed in accordance with your wishes. So what are the secrets to writing a good will? Here are a few key points to keep front of mind:

  1. Choose your executor carefully. The executor is the person you have chosen to carry out the directions of your will. It must be an adult and it should be someone you trust. It is also a good idea to name an executor who is younger than you.

  2. Take care of your loved ones first. Most of us plan to leave something to those closest to us. If you don’t name your loved ones in your will and state how much you want them to receive, your estate might not automatically go to the right people.

  3. Name guardians for your dependents. If you have children under the age of 18, your will should name the person who will be your children’s guardian if you die. If you have pets, they will also need a caretaker.

  4. Name the special causes you want to support. Think about the favourite causes you want to leave a gift to. It could be a health charity, a local animal shelter, or a human rights charity like Amnesty International.

  5. Seek expert help. You might be tempted to write a will on your own, but that decision could end up costing your loved ones more. Speak to a lawyer who specializes in estates. Their guidance might not be as expensive as you imagined and will likely pay off in the long term.

Find more information at www.amnesty.ca/legacy.

www.newscanada.com

Mar 132017
 

(NC) If you’re in the market for a new vehicle, you know there are now many choices and technologies available making your decision much harder than choosing the perfect colour. It also makes good financial and environmental sense to consider electric and hybrid cards in addition to traditional gas models. Start by getting informed of the benefits and drawbacks of each and learn what will give you the best bang for your buck:

Electric. Electric vehicles use an electric motor powered by an internal battery. They produce no emissions and benefit from much lower energy prices compared to gas. In the past, electric cars were considered to be expensive, but affordable models have been rolling off the assembly lines for a few years. Battery technologies in today’s electric vehicles also offer enough driving range to satisfy most daily commuter trips. Due to the abundance of public charging stations, you can also recharge on the go. Many businesses even offer priority spots for green vehicles and free electricity to charge your vehicle while you shop.

Gas. Gas vehicles are the most common and usually offer lower up-front costs. Gas is easy to come by and is considered the default option for fuel on the road. But gas vehicles have numerous drawbacks. Despite their lower up front costs, they can prove to be surprisingly expensive when you add up your fuel expenditures over time.

Hybrid. Hybrid vehicles use a combination of gas engine and electric motor to cut down your gas use. Series hybrids use the electric motor to power your wheels at all times. The motor can draw power from either the car’s battery or the gas engine. Until the battery drains, the vehicle doesn’t even turn on its gas engine. This means you only dip into your gas tank when you need to, and your vehicle won’t release emissions unless the gas engine is on. Blended hybrids passively cut down your gas use by always running the electric motor and gas engine together to provide wheel power. If your speed is low enough, a blended hybrid will cut the gas engine to save on fuel.

Find more information at www.vehicles.gc.ca.

www.newscanada.com

Mar 122017
 

(NC) At 50 years of age, Blake Bell was diagnosed with Parkinson’s disease. At first he reacted like many — experiencing denial and withdrawal. He also suffered from depression, a common symptom of the degenerative brain disease.

That was a decade ago. Over the last 10 years he has rebuilt his life living with Parkinson’s. Bell started a construction estimating company and went back to work part-time. He also revived his social life. Bell even began exercising, taking up boxing with others. He says it helps relieve his symptoms and provides him with peer support. He also has speech therapy sessions.

“I can hardly hold a screwdriver now, where before I used to swing a hammer like it was nothing,” Bell says of the impact of Parkinson’s on his life. “It’s hard to multi-task; your brain doesn’t work that way anymore.”

Fearing the stigma of the disease, Bell had a hard time explaining to people why he was shaking, or why he might be slower and unable to do the things he used to do so easily. It took years before he decided to share his diagnosis widely with others.

“It’s something that’s very personal, sharing that information,” Bell says. But two years ago, he decided to let everyone know. “It’s hard to explain, I just knew it was time — it felt right.”

Bell posted his news on Facebook in 2015 and was joined by 25 friends to support him in Parkinson SuperWalk, the largest annual fundraiser for Parkinson Canada. He attributes part of his healing to the walk.

In 2016, Bell became the event’s first “National Hero.” He cried when he read some of his nomination letters.

“You don’t realize the impact you can have, just by being yourself,” he says.

Until there is a cure, he asks for understanding from everyone, for anyone dealing with a chronic disease or disability.

www.newscanada.com

Mar 102017
 

(BPT) – Millions of Americans with high-deductible health insurance plans rely on health savings accounts to help them manage the costs of health care. If you’re among them, you know how important it is to maximize the value you get out of every HSA dollar.

If you don’t yet have an HSA, you may qualify for one if you receive health insurance through an employer-sponsored plan with a high deductible. Individuals may qualify if their deductible is at least $1,300, and families may qualify with a deductible of at least $2,600, according to the IRS. With an HSA, you can deposit pre-tax dollars into the account to pay for certain health and medical-related expenses – up to $3,400 for an individual and $6,750 for a family in 2017.

While there are approximately 17 million HSAs currently in use in the U.S., insurance industry watchers predict that number could rise significantly as the federal government again addresses health care reform, the Boston Globe reports.

You can maximize the value of your HSA in several ways, including:

* If you’re at risk for arterial or heart disease, you and your doctor may decide preventive screenings are in order. Screening proactively can help catch warning signs of trouble before a more serious problem develops. However, most insurers won’t pay for preventive screening for arterial health.

You can use your HSA dollars to schedule vascular health screening through Life Line Screening. You don’t need a doctor’s referral to schedule a simple, safe and painless ultrasound to detect possible plaque buildup in arteries – a leading factor in stroke and heart disease. Life Line Screening tells you the price of the screening up front and offers appointments in convenient locations throughout communities. Visit www.lifelinescreening.com to learn more and schedule an appointment.

* Keeping track of HSA-eligible expenses can be challenging, but budgeting software can help. Numerous free programs are available online. Most HSA providers also offer online access and digital tools to help you monitor your account, track saving and spending, and better understand the tax impact of your contributions.

* If your employer doesn’t provide vision insurance, you can use HSA funds to pay for eye exams, corrective lenses and even Lasik surgery. Studies show regular vision care is an essential component of overall health, and helps not only preserve your eyesight and eyes, but can also help detect other serious health problems.

* Only about half of American workers have dental insurance through their employers, according to the Bureau of Labor Statistics. For those who do have dental insurance, it typically does not cover all expenses. Yet dental health is intrinsic to overall health. You can use HSA money to pay for dental care, including exams, X-rays, braces, dentures, fillings and oral surgery.

* Smoking is one of the most damaging things you can do for your health, and your HSA dollars can help you kick the habit. Smoking cessation treatment is a qualified medical expense that can be paid for through health savings accounts. When you quit smoking, your body immediately begins to repair the damage caused by smoking, and you reduce your risk of heart attack, stroke and cancer, according to the American Lung Association.

“Smoking is associated with multiple chronic diseases, so quitting is one of the best things you can do for your overall health,” says Dr. Andrew Manganaro, chief medical officer at Life Line Screening. To help people understand their personal risk, Life Line Screening offers a program called “6 For Life” that outlines an individual’s risk for six chronic diseases and includes blood tests.

* Although controlling your weight is another important factor in overall health, few health plans will cover any kind of weight loss program. However, a doctor-prescribed weight loss program aimed at treating a specific disease such as obesity, high blood pressure or heart disease can be paid for with HSA money.

Your health savings account comes with many benefits and cost savings and tax breaks are just two of them. More importantly, when used wisely, your HSA can help you achieve better health.

Mar 082017
 

(NC) With the final numbers tallied for 2016, house price appreciation is expected to narrow in 2017, according to a recent survey of Canada’s residential real estate market.

“Eroding affordability in British Columbia’s Lower Mainland has reached unsustainable ground,” says Phil Soper, president and chief executive of Royal LePage. “This, coupled with public policy measures introduced last year and lower sales volumes, has put visible downward pressure on home prices. While the cost of a home in Greater Vancouver will remain the highest in the country, a modest price reset will provide much needed relief in the Lower Mainland and help reignite overall buyer activity in the region.”

“Unlike Vancouver, where a price correction is underway, there is no relief in sight for the Greater Toronto Area,” he added. “Forward momentum and supporting fundamentals in the region are strong.”

With oil prices stabilizing, new capital spending commitments underway and an energy-friendly administration taking office in the United States, there is a growing sentiment that the worst is over for the Alberta economy. During the fourth quarter of 2016, home prices in the region started on an upward trend, pointing to a resurgence in home prices in 2017.

Economic growth in Saskatchewan is likely to be positive, but slightly below the Canadian average. Home prices are expected to remain relatively flat in the province’s two largest cities.

Manitoba is expected to track closely to national economic growth levels, further supporting the housing sector in the province, which is forecasted to see low single-digit house price appreciation throughout the year.

Ontario’s labour market strength has translated into consumer income growth that supports the rapid expansion of the province’s housing market – particularly in the GTA.

Quebec’s economy showed sound growth in 2016. Success towards eliminating its deficit may result in stimulus spending in the next few years, providing an additional boost for the economy and housing market.

The Maritimes are expected to achieve economic growth throughout the year, along with continued residential housing market gains. This contrasts with Newfoundland and Labrador, which were hit hard by energy price declines last year. It is projected to see further economic and home price declines in 2017.

Nationally, Royal LePage forecasts that the aggregate home price will increase 2.8 per cent in 2017. This is a more moderate increase than the 13 per cent increase seen in the fourth quarter of 2016, which was the highest year-over-year national home price increase in over a decade.

Find more information at www.royallepage.ca/MediaRoom.

www.newscanada.com

Mar 062017
 

(NC) Over the last 70 years, chloroquine has become known as one of the world’s most successful drugs for effective treatment of malaria and rheumatoid arthritis. Now, researchers are investigating its potential to slow the development of Parkinson’s disease.

Dr. Jonathan Brotchie, a senior scientist at Toronto Western Hospital, has high hopes for chloroquine. It has demonstrated an ability to interact with one of the brain’s primary growth factors — a protein responsible for the health of the cells in this complex organ.

Preliminary work with laboratory mice has shown that chloroquine could stave off the biochemical damage Parkinson’s inflicts on the brain. Hypothetically, this should also mitigate effects like declining motor control, Brotchie says.

Chloroquine is widely available in a generic form, however, there is little incentive for any pharmaceutical company to assume the risk and expense of exploring the potential of a product that could as easily benefit its competitors.

With the recent Porridge for Parkinson’s (Toronto) Pilot Project Grant from Parkinson Canada, Brotchie can conduct the preliminary research that could encourage one of these firms to adapt the drug to fight Parkinson’s. For this, he is grateful.

“If I can demonstrate that chloroquine works, then that’s going to de-risk Parkinson’s disease,” he says.

It is possible that chloroquine might not be the only drug that can produce the same results in the brain, but it might be the only one available now, Brotchie says. Plus, it has already been shown to be safe.

What Brotchie and his colleagues learn from working with chloroquine will lay the foundation for future research into even better medications.

“We want to do everything we can to be responsible for the development of the treatments of tomorrow,” he says.

Find more information at www.parkinson.ca.