Consider Anna and Olaf who are in the process of selling their $400,000 home. They’ll be left with net proceeds of approx. $364,000 after paying 9% in sales expenses (transfer taxes, real estate commissions, etc.). The new house they want to purchase costs $500,000, leaving them $136,000 short. Option 1: sell or liquidate $136,000 worth of investments or retirement assets. They will need to “gross up” the withdrawal for taxes if the funds are … (0 comments)
A lot of discussion about “sequencing of distributions” has been taking place recently in financial planning circles. “Sequencing of Distributions” looks at the order in which you take distributions from your retirement account. This matters because the order in which you take distributions has a very significant impact on how long your retirement assets will last.
Consider the two examples illustrated in the chart. Column 1 has the same amount of distributions scheduled for the next five years, regardless of how the market performs. Column 2 changes the amount of distributions in years 2, 3 and 4, based on the … (0 comments)
reverse mortgage: LOW BOND YIELDS ARE CAUSING PROBLEMS FOR RETIREES
- 06/06/16 06:00 AM
Most retirement plans created over the past 30 years have assumed that government bond yields during retirement would be a lot higher than they are right now. As illustrated in the chart, the yield on the 10-yr US Treasury Note fluctuated between 4% and 8% during most of the 1990s, and between 2% and 4% over the past 10 years. However, the yield has stayed below 2% for most of the past two years. Even so, interest rates in the US are not nearly as low as they are in the rest of the world.
In fact, over 30% of … (0 comments)
reverse mortgage: What is a Reverse Mortgage?
- 05/16/16 06:40 AM
One way for you to potentially improve your cash flow during retirement is to use a home equity conversion mortgage (also known as a "HECM" or "reverse mortgage"). The HECM is a mortgage loan made by a private lending institution such as a bank, credit union or mortgage company. The loan is insured by the Federal Housing Administration (FHA), which is a division of the US government. You are not required to make monthly mortgage payments, and any interest that you owe is simply added to your loan amount. Here's how it works: Assume you are 62 years old and your … (2 comments)
reverse mortgage: HOW TO AVOID THE NEW MEDICARE PART B SURCHARGES
- 04/25/16 06:08 AM
A new law came into effect this year that changes the income scale used to calculate Medicare surcharges. This change will impact Medicare surcharges starting in 2018, using income from 2016 (see income bracket illustration). Note: Medicare surcharges are calculated using modified adjusted gross income from the two prior years. For example, 2016 surcharges are calculated using income from 2014… 2017 surcharges will use income from 2015… 2018 surcharges will use income from this year, 2016. Medicare surcharges create higher out-of-pocket costs for higher income beneficiaries without providing any additional health benefits. You may be able to avoid these surcharges by keeping your … (2 comments)
Home prices in many markets have gone up recently. This is leaving many retirees with sticker
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