Guaranteed Income Important to Americans | AGT The Safe Money People

In the past, employer-sponsored pensions were much more common, and employees were encouraged to save more thanks to contribution matches. Now, 401(k)s are the leading retirement savings vehicle in the workplace, and self-directed savings, with varying degrees of employer matches, leave retirees’ financial futures all over the board.
As a result, more people lack the savings to last a lifetime when they leave the workforce. According to John Huff, the 2016 President of the National Association of Insurance Commissioners, four out of 10 baby boomers have no retirement savings. None at all.

As you can imagine, this poses a challenge for financial professionals working with clients who have little to no assets but still need retirement income solutions. And it’s not just an issue for people who didn’t save. Others may have experienced losses in the securities markets or had to make substantial withdrawals during the recession.
To find a retirement income strategy that may be successful, financial professionals have gotten resourceful. Some financial professionals who once eschewed annuities are now taking a second look.

Just because people don’t have a lot of money saved for retirement doesn’t necessarily mean they have no assets. For example, some boomers may be out of cash but living in an oversized house they no longer need. In this scenario, homeowners who downsize before retirement could use some of the proceeds to purchase an annuity that will provide a guaranteed stream of income during retirement.

Others may have either received, or expect to receive, a modest inheritance and can use an annuity to convert that fixed amount into a lifetime of retirement income.
While it’s becoming more common for financial professionals to recommend annuities, employers are still warming up to the idea. Eight in 10 U.S. employees say they’d like to have a guaranteed income option in their defined contribution plan, but only 50 percent of employers understand this — and less than 1 percent offer it.

The appeal of pensions was that they did more for retirees than just provide retirement income; they provided peace of mind. The same can be said of annuities. In fact, nine out of 10 affluent households with annuities say they’re confident in their retirement.

Consider Going Back-to-School Post-Retirement - AGT The Safe Money Poeple

This fall, young people aren’t the only ones who are going back to school. Many colleges and universities have made it easier for older folks to get a degree, and retirees across the country are taking advantage.

People aged 65 and older currently make up a little more than 13 percent of the U.S. population and as the Baby Boomers age into senior-dom, that number will surely rise. 

While retirement may bring the promise of a warmer climate and all-day golf outings, many seniors are opting to go back to school either for their own personal enrichment or to work towards a degree.

According to an article recently published in the Chicago Tribune, Shimer College, is opening up it’s classrooms to people over the age of 60 for free. A small liberal arts school in Chicago, the hundred or so students at Shimer have the option to participate in a Great Books program that includes the works of Shakespeare, Kafka, Marx, Einstein, and Nietzsche.

“One of the things that is important to make that happen is to have a lot of different perspectives in the classroom,” said Shimer spokeswoman Isabella Winkler. “It is always valuable to have generational differences. We wanted to open the classes to senior residents who might have a desire to get involved in this sort of conversation. It would benefit our students as well.”

Shimer isn’t the only college that sees the benefit in class discussions having generational differences. All of the public universities and colleges in Texas now offer a tuition reduction program for people 55 or older. And the Texas Higher Education Coordinating Board provides a tuition exemption for Texas residents who are older than 65 years of age and want to audit classes at a public university. Aside from having to be a Texas resident and enroll at a participating university, this program requires that seniors “enroll in a class that is not already filled with students who are paying full price for their courses. (If the class is too small to accommodate both regular students and senior citizens, the regular students must be given priority.)”

A similar program is offered at on both campuses of Florida Atlantic University (Boca Raton and Jupiter) called the Lifelong Learning Society. The program was created in 1980 in Boca Raton and then extended to the Jupiter campus in 1997. The LLS program is offered from October through June and FAU professors teach all the courses, which range in subjects from foreign policy, music, art, philosophy, current events, and more.

According to the FAU website, “This community of learners with no age threshold enjoys a diverse and creative curriculum, along with concerts and entertainment. In establishing this program, FAU recognized the still unfulfilled demand for educational and intellectual stimulation for adults who are beyond the traditional university years.”

And in the entire state of California, you can attend one of the 23 state universities for free, regardless of income, through their Over 60 Program. Of the roughly 433,000 students who attend a public university in California, only about 1000 of them are participants in the Over 60 Program.

In a blog post on the San Jose State University website, Timothy Fitzgerald, 67, who, while living on Social Security and disability benefits has completed five degrees and three Master’s degrees at SJSU, was quoted as saying:

“I see it as a benefit that the state can offer older citizens, helping us pursue a life of the mind. I never would have had an opportunity to go to school unless there was support for tuition. I do not want to sit on the sidelines.”

And thanks to the many public programs that promote education for older adults, no one has to sit on the sidelines during their post-retirement years.

To see what your state might have to offer check out the Senior Citizen Guide for College blog.

Source: http://www.huffingtonpost.com/hilary-young/consider-going-back-to-sc_b_3894493.html

Are Baby Boomers too optimistic about retirement? AGT The Safe Money People

If you’re a Baby Boomer within sight of age 65, you’re probably thinking about your next move—and it may well be a career change instead of a traditional kick-back-and-relax retirement. Among 1,005 Boomers who haven’t yet left their full-time careers, 60% expect to keep working at least part-time after they “retire,” says a study from Bankers Life’s Center for a SecureRetirement.

The job market is ready for them. Of the 2,293 Boomers in the study who have already retired but have found other work, 80% reported it was “easy” to find the jobs they have now.

“As the next wave of Boomers retires, the competition is likely to intensify,” says Bankers Life president Scott Goldberg. “But, with part-time and freelance roles becoming more prevalent in the overall job market, there is good evidence to suggest that future retirees will have an even greater number of positions to consider, even if the competition for those roles gets more intense.”

Great, but anyone contemplating what lies ahead might want to consider two of the study’s less cheerful findings. First, it seems that most people overestimate their ability to choose when they retire. Nearly seven in ten (69%) of middle-income retirees would have liked to have stayed longer in their old careers, but had to leave earlier than they planned for “reasons beyond their control,” the report says—most commonly because of health problems (39%), being laid off (19%), or to care for a loved one (9%).

Second, Boomers’ expectations about what they’ll be able to earn in their post-retirement careers seem overly optimistic. Only about one in five (21%) of the people in the survey who are still working in their primary careers say they’d be “willing to take a pay cut” when they move on to another job in retirement. That doesn’t jibe with the experience of current retirees who are working, almost three-quarters (72%) of whom report earning less on an hourly basis now than they did in their old roles. More than half (53%) say they make “much less.”

That doesn’t mean they’re unhappy. About 80% of the people who retired and then found new jobs say they like their current careers better than their old ones. They also report less stress and “better relationships” than the Boomers surveyed who haven’t retired yet.

Even so, the study’s message is clear. Given your druthers, you might stay in your pre-retirement career until you’re 65, 70, or beyond, and then move on to something that pays equally well. But, just in case that doesn’t work out, it’s smart to have a Plan B.

AGT is here to help plan that option B

Source: http://fortune.com/2015/08/07/baby-boomer-retirement/

Is Your Cash Gift Taxable?

Parents and grandparents often dole out “gifts” to the children to help with various and sundry expenses. But when is a cash gift taxable to the recipient? Gifts up to $14,000 from an individual (or $24,000 from a legally married couple) aren’t taxable, according to the IRS, but you may have to pay taxes on anything that exceeds that amount. Here are more considerations to bear in mind regarding non-taxable cash gifts: • Gifts made to a legally married spouse are never taxable. • Tuition or medical expenses paid directly to a medical or educational institution on someone else’s behalf are not taxable. • Gifts made to a political organization for its use are not taxable. • Gifts made to charities are not taxable. Also note that you may not be able to deduct the amount you gift from your income tax, with the exception of qualified charitable contributions. IRS.gov. April 1, 2015. “Seven Tips to Help You Determine if Your Gift is Taxable.” http://www.irs.gov/uac/Seven-Tips-to-Help-You-Determine-if-Your-Gift-is-Taxable. Accessed April 1, 2015.