src="//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"> About Your Money | Boomers & Beyond
Jul 202017
 

(BPT) – Retirement is the time in your life when you can throw off the shackles of your daily responsibilities and truly enjoy the fruits of everything you spent years working toward. It’s an empowering feeling and you’ve earned it. You’ve planned and you’ve saved, but now that you’re here, don’t make the mistake of believing your financial planning is over.

In fact, in some ways, it has only begun.

Continuing to support your financial strength in retirement

On the day you enter retirement, your financial focus shifts, but its importance doesn’t diminish. As a retiree, taking an annual review of your finances is more important than ever. You deserve to live the retirement you want. To be sure your finances are up to the task, here are a few specific items to review in your annual post-retirement financial checkup.

1. Life expectancy

When you first created your retirement plan, you likely discussed an end-of-life age with your adviser that you could use as a benchmark and plan toward. Now it’s time to revisit that age again and take an objective look in light of your overall health and any existing conditions you may have. And don’t be surprised if you find out you’re poised to live far longer than you expected all those years ago. It’s great news, but it also means you must adjust your finances accordingly.

2. Life insurance

Look at your life insurance policy. You should take the time to determine if it is still needed or affordable now that you’ve entered retirement. As you review your life insurance policy, you may determine you don’t need it anymore because your children are no longer dependent on you and you have minimal outstanding debts. You may also find that the premiums have increased in recent years and the policy is too costly to maintain. If this is the case, you may want to sell it. It’s one less financial burden you need to worry about, and the influx of additional cash will be a welcome surprise.

It’s important to remember that your life insurance policy is your own personal property and you have the right to sell it, just as you would any other financial assets or physical possession. The sale of your policy to a third-party investor is known as a life settlement transaction, and selling the policy could bring you as much as seven times the amount you would earn for surrendering it. Typical candidates for a life settlement transaction are age 70 or older with a policy of $100,000 or more, according to the Life Insurance Settlement Association (LISA).

3. Asset allocation

During your working years, you probably reviewed your assets several times, and you may have even done some rebalancing to ensure you had the right mix of bonds, stocks and cash in your financial portfolio. But this practice doesn’t end simply because you’ve entered retirement. Look at your assets and take the opportunity to rebalance — just as you did during your working years — to ensure your money is meeting both your short-term needs and your long-term goals.

4. Home equity

Your home is often your most valuable asset. If you own the home where you live, take a moment to assess the amount of equity you have tied up in it. This may be the perfect time to downsize. You could also consider a reverse mortgage, which would allow you to convert some of the equity in your home into cash you could use for other needs. The money you acquire through a reverse mortgage or through the sale of your home via downsizing could then be used to invest in a fixed-income investment — such as annuities or bonds — that will provide ongoing income.

Enjoy retirement on your terms

Your working years may have ended, but your financial management is ongoing. Whether you manage your money yourself or you work with a financial adviser, take charge of your retirement by revisiting your assets and your options. Remember, you’ve worked hard for your retirement, and with a few small changes along the way, you have the ability to make it even greater.

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

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Jul 132017
 

(NC) Through the touch of a button and the click of a mouse, we can now make countless decisions and transactions in the privacy of our own homes without speaking to anyone. However, nothing quite replaces a relationship with a professional who knows more about a product or service than you do. In a recent survey, over half of Canadians indicated that they do not have a relationship with key professionals. Take a look at how these people can help you.

Lawyer. Useful for more than just suing somebody, lawyers can help you to prepare a will, purchase property, or set up a family trust.

Insurance Advisors. Chartered Insurance Professionals (CIPs) can help you figure out the small print in your home insurance policy to make sure you’re protected against floods, fires and other disasters; yet only 26 per cent of Canadians have a relationship with a CIP. They can give you the peace of mind that should the unexpected occur, you’ll be covered and supported.

Bankers. Online banking has eliminated the need for a personal banking relationship for most people. But working with a trusted banker can be helpful when applying for a loan or mortgage. Bankers can explain in simple terms the ins and outs of interest and other conditions of the loans, as well as answer all your questions on the spot.

Accountant. Tax season happens once a year, but 71 per cent of respondents indicated they don’t have a professional relationship with an accountant. Accountants can help you ensure you are filing your taxes correctly, and haven’t missed any boxes or claims.

Financial Advisor. These money experts are the professionals with whom most respondents said they have a relationship. They can assist in investments, business advice, and planning for your kids’ education or your retirement.

Find more information at beassured.ca.

www.newscanada.com

Jul 032017
 

(NC) If someone were to look at your bank statement, what would they learn about you? Do you eat out often? What about emotional spending or group purchases? Taking a closer look at your spending habits can be eye-opening, and it can also help you rethink your purchasing priorities. Here’s how to decode what your bank statement signifies:

What your priorities are. If most of your monthly expenses go to organic groceries, then you likely value healthy eating. If what matters most to you is going out with friends, then your bank statement will reflect that. Make sure you are spending your money on what’s important to you.

How you value things. As a consumer, you always have the choice to put something back on the shelf because you feel it’s not worth the price. But when you buy something, you are basically dictating its worth. Looking back at your bank statement, was everything you purchased worth what you spent?

How you’re feeling. Did you resort to retail therapy last month? In moderation, emotional spending can be healing. But be careful as these expenses can add up. Try leaving your credit card at home and consider using your debit card instead. By using the money you already have, it’s easier to track your spending in real time.

How organized you are. Do you hate the hassle of withdrawing cash or writing a cheque? Do you prefer to pay for rent or split a group gift purchase through your online banking? Interac e-Transfer is a safe, efficient payment solution and is a great option for keeping track of your expenses. Additional features rolling out soon, like Request Money and Autodeposit, will make your life even easier.

Learn more at www.interac.ca.

www.newscanada.com

Jun 202017
 

(NC) A home equity line of credit can improve your monthly cash flow by consolidating higher-interest debt or it can help increase your home’s value by financing renovations. But this line of credit requires discipline to avoid overborrowing against your home equity. Consider these strategies to protect your long-term financial security.

  1. Establish a repayment plan. One option is to set aside a portion of your home equity line of credit in a sub-account with a fixed-term repayment schedule.

  2. Pay more than just the monthly interest. You can usually pay down any amount of the money you owe at any time without an extra fee.

  3. Establish a clear plan. This includes making a realistic budget for any home renovation projects you are funding.

  4. Create an emergency savings fund. Using a home equity line of credit for an unexpected circumstance like job loss carries risks. You may find yourself in a debt spiral if you borrow money to cover your monthly bills for an extended period of time.

  5. Avoid further debt. It can be a smart decision to use a home equity line of credit to consolidate higher-interest debt. But if your spending habits are the cause of this existing debt, follow a budget and avoid the temptation to continually borrow against your home’s equity.

  6. Negotiate a lower credit limit. Lenders may approve you for a higher limit than you need, making it tempting to spend over your intentions and means.

  7. Shop around. Home equity line of credit interest rates vary from one bank to another.

As with any financial product, review your terms and conditions carefully and ask your financial institution questions about anything you don’t understand.

www.newscanada.com

Jun 182017
 

(NC) Buying a new home is an exciting but often stressful experience. The variety of financing options now offered by lenders is overwhelming.

One of the most popular options is a home equity line of credit. With interest rates typically lower than other forms of credit, this line of credit can help you reach your financial goals. However, there are several factors to consider when deciding if this product is right for you.

Banks market home equity lines of credit under different names, which might make it challenging to recognize when you are being offered one. They are commonly combined with a regular term mortgage in the form of a “readvanceable mortgage.”

When combined this way, the credit limit on your home equity line of credit will often increase automatically as you pay down the principal on your mortgage. A readvanceable mortgage may also tie together other credit and banking products —such as personal loans, credit cards and car loans — under a single credit limit.

Benefits of bundling these products together include convenience and lower interest rates. But the downsides include fees and restrictions if you want to switch to another lender, and variable interest rates that could increase on short notice. Your financial institution also has the right to demand that you pay the full amount owing at any time.

When deciding if this lending product is right for you, remember that your home is likely your biggest investment. You should beware of overborrowing against its equity, especially if you’re counting on it to fund your retirement.

“Most lenders allow you to make interest-only payments on your home equity line of credit, making it easier to delay repaying the principal balance,” explains Lucie Tedesco, commissioner of the Financial Consumer Agency of Canada. “Continually borrowing against your home’s equity without repaying the principal can jeopardize your long-term financial security. For instance, in the event of a housing market correction you might owe more than what your home is worth.”

Ask yourself if a low interest rate and easy access to credit may encourage you to spend more than you can afford to pay back. You could find yourself in a debt spiral, using additional home equity just to stay current on your mortgage. This could make you more vulnerable to unforeseeable events, like job loss, illness or an interest rate hike.

Consider creating your own plan to pay down the principal amount borrowed over a fixed period. Aim to pay more than the minimum payment or interest every month. With a home equity line of credit, there is usually no penalty to pay back as much as you can at any time.

Find more information online at canada.ca/money.

www.newscanada.com

Jun 172017
 

(NC) You’ve saved up a 20 per cent down payment and are eager to get into the real estate market. For the remaining amount, it’s likely your bank will offer you a readvanceable mortgage. But should you take it?

This popular product, marketed under different names from one bank to another, combines term mortgages with home equity lines of credit. Like a credit card, the amount of money available in your line of credit decreases as you borrow and increases as you pay it back. Your credit limit may also increase automatically as you pay down your mortgage. Some lenders bundle other financial products like car loans or credit cards together under a readvanceable mortgage, typically at an attractive interest rate.

At first glance, this may seem appealing. But keep in mind any applicable fees and the risks of tying different credit products together before signing on the dotted line.

Readvanceable mortgages make it more complicated and expensive to switch lenders to get a better interest rate when your mortgage is up for renewal. You may need to repay all credit products tied together under the readvanceable mortgage. And because it’s secured by a collateral charge against your home, there are additional legal fees you wouldn’t incur when moving a traditional mortgage.

“Lenders can demand that you repay your home equity line of credit, lower your credit limit or increase your interest rate at any time,” cautions Lucie Tedesco, commissioner of the Financial Consumer Agency of Canada. “This would impact all credit products bundled together in your readvanceable mortgage.”

Remember that a home equity line of credit is secured using your home as collateral — meaning if you can’t pay back the money you owe, your lender can take possession of it.

Find more information online at canada.ca/money.

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.

Feb 082017
 

(NC) March is Fraud Prevention Month in Canada and the federal government is reminding Canadians to be on guard against offers that seem too good to be true. Seniors in particular can become victims of various forms of fraud. Those who are isolated are even more at risk.

Scammers target seniors with several kinds of fraud, from telephone and email scams to fraudulent telemarketing.

One of the easiest ways for seniors to protect themselves from fraud is to order a credit report every year from Canada’s credit reporting agencies, Equifax and TransUnion. A credit report will show when someone else has opened credit cards or loans in your name.

While powers of attorney and joint bank accounts can help seniors and those who care for them manage and protect their finances, these tools can be abused by people in positions of trust.

To guard against this risk, seniors can reduce the number of banking transactions that need to be carried out by someone else on their behalf by using direct deposit for pensions and other regular payments, as well as preauthorized payments for regular bills.

“We know seniors are targets for fraud and we want to make sure they and their families understand how to identify and prevent fraud,” says Jane Rooney, Canada’s financial literacy leader. “That’s why the Financial Consumer Agency of Canada offers plenty of information to help protect seniors and vulnerable populations.”

If you or someone you know have been a victim of fraud, contact the Canadian Anti-Fraud Centre at 1-888-495-8501. Find more information online at itpaystoknow.gc.ca.

www.newscanada.com

Jan 282017
 

(NC) Tax time can be a hectic part of the year. Fortunately, there’s plenty you can do to get ready. Check out these tips to get through the season without breaking a sweat.

  1. Get ready. Everything you need to know to do your taxes, including important due dates, is available at cra.gc.ca/getready.

  2. Do your taxes on time — and online. If you owe taxes, file your return and pay on time to avoid late-filing penalties and interest. If you don’t owe taxes, you should still do your taxes on time to receive your Canada child benefit and GST/HST credit payments without delay. If you’re expecting a refund, it can be in your bank account in as little as eight days if you file online and sign up for direct deposit.

You can prepare your return yourself using the “auto-fill my return” service to fill in parts of your return, available in some NETFILE-certified tax preparation software programs when you are registered in the Canada Revenue Agency’s My Account. Check out the CRA website to see certified products — you may also be eligible for free software.

  1. Claim your deductions, benefits and credits. Learn about the deductions, benefits and credits you may be eligible for on the CRA website. These include child and family benefits, credits for medical expenses and charitable donations, the disability tax credit, and more.

  2. Get help. If you have a modest income and simple tax situation and need help completing your return, many community organizations host free tax preparation clinics that can help. The Community Volunteer Income Tax Program is a great resource that helps thousands for free every year.

  3. Ask for a payment plan. Some taxpayers may not be able to pay all their taxes by the due date. If you owe taxes but can’t pay, you may be able to set up a payment arrangement to pay in smaller amounts over time.

www.newscanada.com

Jan 272017
 

(BPT) – Americans now retire with far more debt than previous generations. This can pose a significant risk to retirees’ income, and may result in them not having enough. It also means that when a spouse dies, there could be little left over as creditors deplete an estate’s assets – forcing survivors to make difficult decisions and risking grim circumstances for surviving spouses who may struggle to pay off mortgages.

In fact, among baby boomers, 80 percent carry some form of debt in retirement, and 47 percent are still paying on their homes, according to a 2015 Pew Charitable Trusts report. And a Dec. 20 Government Accounting Office report said the government took $171 million out of Social Security paychecks from those over the age of 50 to cover unpaid student debt. Many planning for retirement are struggling to pay off debt, especially since Americans increasingly borrow to address life’s challenges, including taking home equity loans to pay for their children’s college education.

“With retirement debt so high, households must take steps to help mitigate the risk of financial insecurity in their golden years – and leaving debt behind for family members to absorb,” says Jill Perlin, a vice president, Advanced Marketing, Prudential Individual Life Insurance.

“In the past many financial experts have recommended that retired couples don’t need life insurance, since lost earnings from work no longer need to be replaced if a spouse dies,” said Perlin. “But retirees now face a whole new set of circumstances, especially given current debt levels. In retirement, the debt lives on for the surviving spouse, while income drops.”

In the last few decades, almost everything has changed for Americans planning for retirement. Many retirees no longer reap the benefits of employer-sponsored pension and health insurance plans. With both spouses working, Social Security tends to replace less of the household income in retirement. Workers in previous generations often drew two, even though one spouse often stayed home – the worker’s direct benefit and a spousal benefit based on the breadwinner’s work record. Notably, most Americans paid off their mortgage before retiring.

Today, while some retirees still collect income from defined benefit pension plans, most private sector employees are largely responsible for their own retirement savings. Retiree health care benefits are also increasingly rare, requiring households to fund their own health care costs beyond Medicare’s limited coverage.

While borrowing money can prove to be a helpful financial strategy for families in many stages of life, including incurring debt to fund children’s education, Perlin says, Americans’ cozy relationship with debt creates financial demands in retirement that threaten financial security, including:

  • Higher monthly payments that stretch over longer terms.
  • The need to save money just to pay off debt instead of saving enough to fund retirement through a 401(k) plan or other savings vehicle, with Americans saving an average of just $111,000 to be spread over the course of retirement.

But retirement debt poses perhaps the most frightening risk when one spouse passes away.

“Life insurance death benefits can help provide income for the surviving spouse,” Perlin said, “providing a family with meaningful choices to navigate the unknowns of life in retirement, and perhaps even enabling the surviving spouse to remain in the home.”

This, in turn, can also provide surviving children some peace of mind.

“The convenient access to credit carries risks as individuals borrow more over their lifetimes through student debt, credit cards, mortgages, home equity loans, lines of credit and reverse mortgages – with much of that going with them into retirement,” Perlin said. “Debt has rewritten the rules of retirement planning and has given insurance protection an important new role when it comes to securing a stable financial future.”

Life insurance is issued by The Prudential Insurance Company of America, Newark, New Jersey, and its affiliates.

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